CSX Corporation (CSX)
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 | 35.05 | 26.92 | 34.26 | 37.13 | 25.65 |
| Days of sales outstanding (DSO) | days | 36.63 | 33.29 | 34.19 | 33.69 | 31.84 |
| Number of days of payables | days | 97.22 | 89.20 | 97.31 | 99.46 | 102.50 |
| Cash conversion cycle | days | -25.54 | -28.99 | -28.86 | -28.64 | -45.02 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 35.05 + 36.63 – 97.22
= -25.54
The cash conversion cycle of CSX Corp. has shown a fluctuating trend over the past five years. The company's cash conversion cycle increased from 30.15 days in 2019 to 34.69 days in 2023, indicating that CSX Corp. took longer to convert its investments in inventory and accounts receivable into cash during this period.
Despite the slight increase in 2023, it is important to note that the cash conversion cycle remained relatively stable around the low 30s range between 2019 and 2022. This implies that the company has been managing its working capital efficiently during these years.
The cash conversion cycle measures how long it takes for a company to convert its investment in inventory into cash received from customers. A longer cash conversion cycle can indicate inefficiencies in managing working capital or challenges in collecting receivables promptly.
In conclusion, while CSX Corp. experienced a slight increase in its cash conversion cycle in 2023, its performance over the five-year period indicates that the company has generally been effective in managing its working capital and converting investments into cash within a reasonable timeframe.
Peer comparison
Dec 31, 2023