CTS Corporation (CTS)

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 60.94 64.81 60.31 61.40 60.39 62.79 67.47 57.01 55.04 57.17 55.01 57.73 58.74 53.89 57.14 54.74 49.50 53.05 50.70 50.48
Days of sales outstanding (DSO) days 52.10 57.55 60.81 60.94 56.56 61.35 65.96 65.23 58.49 56.71 59.60 66.25 69.70 67.05 52.22 57.23 60.71 62.21 64.91 63.32
Number of days of payables days 44.16 49.41 51.21 51.67 51.61 64.99 63.80 65.22 61.74 55.04 53.64 64.72 64.66 60.71 42.37 56.04 56.51 56.57 59.85 62.79
Cash conversion cycle days 68.88 72.95 69.90 70.68 65.33 59.15 69.63 57.02 51.78 58.83 60.97 59.26 63.79 60.23 67.00 55.92 53.70 58.69 55.77 51.01

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 some fluctuations in recent quarters. In Q4 2023, the company's cash conversion cycle was 68.88 days, indicating that it takes approximately 69 days for the company to convert its investment in inventory into cash received from customers. This was slightly lower compared to Q3 2023, where the cycle was 72.95 days, suggesting an improvement in the efficiency of inventory management and cash collection.

Looking back further, in Q2 and Q1 2023, the cash conversion cycle was 69.90 days and 70.68 days, respectively, showing consistency in the working capital management practices of the company during that period. Comparing these figures to the same quarters in 2022, there has been an overall increase in the time it takes for the company to convert its resources into cash.

It is worth noting that Q3 2022 had the lowest cash conversion cycle of 59.15 days in the past eight quarters, while Q1 2022 had the highest cycle of 69.63 days. The varying cycles suggest that CTS Corp. may have experienced changes in its inventory turnover, accounts receivable collection, and accounts payable payment patterns over the past year.

Overall, monitoring the cash conversion cycle can provide insights into the company's efficiency in managing its working capital and liquidity. Investors and stakeholders may use this information to assess the company's operational effectiveness and financial health.