Chesapeake Utilities Corporation (CPK)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 21.70 | 25.68 | 21.63 | 21.76 | 14.13 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 21.70 | 25.68 | 21.63 | 21.76 | 14.13 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 21.70 + — – —
= 21.70
The cash conversion cycle for Chesapeake Utilities Corporation has shown fluctuation over the past five years. It increased from 14.13 days as of December 31, 2020, to 25.68 days as of December 31, 2023, before decreasing slightly to 21.70 days as of December 31, 2024.
A longer cash conversion cycle indicates that the company takes more time to convert its investments in inventory and accounts receivable into cash from sales. This can potentially strain liquidity and working capital management.
The company should focus on improving efficiency in managing its working capital components to shorten its cash conversion cycle and enhance its cash flow generation capabilities. Regular monitoring and optimization of inventory levels, credit policies, and collection processes can help in achieving a more favorable cash conversion cycle.
Peer comparison
Dec 31, 2024