CTS Corporation (CTS)

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	60.94	60.39	55.04	58.75	49.50
Days of sales outstanding (DSO)	days	52.10	56.56	58.49	69.70	60.71
Number of days of payables	days	44.16	51.61	61.74	64.66	56.51
Cash conversion cycle	days	68.88	65.33	51.78	63.79	53.70

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 60.94 + 52.10 – 44.16
= 68.88

The cash conversion cycle of CTS Corp. has shown variations over the past five years. In 2023, the cycle increased to 68.88 days from 65.33 days in 2022, indicating a delay in the conversion of resources into cash. The company took longer to convert its investments in inventory and receivables to cash during this period.

Comparing to 2021, where the cycle was 51.78 days, the increase in 2023 suggests that CTS Corp. may have faced challenges in managing its working capital efficiently. Conversely, the cycle in 2020 was slightly higher at 63.79 days, indicating an improvement in 2023 despite not reaching the lower levels seen in 2021.

Looking back to 2019, the company had a cash conversion cycle of 53.70 days, making 2023 the second-highest cycle in the past five years. Overall, CTS Corp. should focus on optimizing its cash conversion cycle to ensure a healthy cash flow and efficient management of its operating cycle in the future.