Chesapeake Utilities Corporation (CPK)
Cash conversion cycle
Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
---|---|---|---|---|---|---|
Days of inventory on hand (DOH) | days | 101.66 | 114.42 | 95.63 | 56.45 | 64.91 |
Days of sales outstanding (DSO) | days | 41.16 | 35.08 | 48.63 | 52.17 | 52.98 |
Number of days of payables | days | 232.21 | 215.68 | 203.92 | 244.68 | 227.41 |
Cash conversion cycle | days | -89.40 | -66.18 | -59.66 | -136.07 | -109.53 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 101.66 + 41.16 – 232.21
= -89.40
The cash conversion cycle of Chesapeake Utilities Corp has shown varying trends over the past five years. In 2023, the company's cash conversion cycle was negative at -14.55 days, indicating that it took less time for the company to convert its resources into cash. This could be attributed to efficient management of working capital or improved cash collection processes.
In 2022 and 2021, the cash conversion cycle increased to 10.29 days and 8.48 days, respectively. This suggests that the company took longer to convert its resources into cash during these years. The increase in the cash conversion cycle could indicate issues such as slower collections from customers or higher inventory holding periods.
The most significant fluctuations were observed in 2020 and 2019 when the cash conversion cycle was highly negative at -60.89 days and -30.80 days, respectively. A highly negative cash conversion cycle can indicate that the company is able to collect cash from customers before paying its suppliers. While this may be beneficial in the short term, it could also suggest potential inefficiencies in managing working capital.
Overall, Chesapeake Utilities Corp's cash conversion cycle has varied over the years, highlighting the importance of closely monitoring working capital management practices to ensure optimal cash flow and liquidity.
Peer comparison
Dec 31, 2023