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.