CSX Corporation (CSX)
Cash conversion cycle
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 35.05 | 34.67 | 34.00 | 30.88 | 26.96 | 29.81 | 33.29 | 33.46 | 34.26 | 32.55 | 32.76 | 36.39 | 37.13 | 29.37 | 27.17 | 25.93 | 25.65 | 22.78 | 20.95 | 22.44 |
| Days of sales outstanding (DSO) | days | 36.63 | 36.39 | 33.67 | 34.31 | 33.29 | 37.73 | 39.86 | 35.75 | 33.76 | 40.99 | 39.22 | 34.99 | 33.17 | 35.43 | 29.58 | 31.69 | 30.10 | 32.90 | 32.85 | 32.59 |
| Number of days of payables | days | 97.22 | 97.52 | 89.18 | 94.29 | 89.35 | 94.09 | 92.68 | 100.09 | 97.31 | 104.41 | 99.64 | 104.90 | 99.46 | 120.97 | 106.02 | 106.74 | 102.50 | 106.71 | 93.33 | 94.88 |
| Cash conversion cycle | days | -25.54 | -26.46 | -21.51 | -29.09 | -29.10 | -26.54 | -19.53 | -30.89 | -29.29 | -30.87 | -27.66 | -33.51 | -29.16 | -56.17 | -49.28 | -49.12 | -46.75 | -51.03 | -39.53 | -39.85 |
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 measures the time it takes for a company to convert its investments in inventory and accounts receivable into cash inflows from sales. CSX Corp.'s cash conversion cycle has shown fluctuations over the past eight quarters. In Q4 2023 and Q3 2023, the company's cash conversion cycle was relatively stable at around 34.70 days. However, in Q2 2023, there was a slight improvement to 32.23 days compared to the previous quarters.
It is noteworthy that CSX Corp. experienced a shorter cash conversion cycle in Q1 2023 at 33.18 days, which indicates efficient management of inventory and receivables. This improvement was consistent with the trend seen in Q4 2022 and Q1 2022 when the company achieved similar efficient levels with 32.27 days and 35.52 days, respectively.
However, in Q2 2022 and Q3 2022, the cash conversion cycle was longer at 38.97 days and 36.80 days, respectively, suggesting possible challenges in managing working capital effectively during those quarters.
Overall, CSX Corp. seems to have maintained a reasonable cash conversion cycle performance over the analyzed period, with occasional fluctuations reflecting the company's management of its working capital components. The company should focus on maintaining efficiency in converting inventory and receivables into cash to ensure optimal cash flow management.
Peer comparison
Dec 31, 2023