California Water Service Group (CWT)
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 | 15.89 | 15.33 | 13.79 | 13.30 | 12.66 | 11.06 | 10.70 | 10.69 | 9.74 | 9.61 | 9.86 | 9.59 | 9.23 | 9.60 | 9.40 | 9.16 | 8.74 | 9.06 | 8.13 | 7.53 |
| Days of sales outstanding (DSO) | days | 55.06 | 72.24 | 60.92 | 46.33 | 49.54 | 66.41 | 60.25 | 48.60 | 54.50 | 63.40 | 56.50 | 44.33 | 47.56 | 63.76 | 55.70 | 44.35 | 69.52 | 61.65 | 55.66 | 42.10 |
| Number of days of payables | days | 154.60 | 151.67 | 137.52 | 120.29 | 142.10 | 158.79 | 141.53 | 143.01 | 147.85 | 151.99 | 136.75 | 125.68 | 137.61 | 141.77 | 143.89 | 111.53 | 122.39 | 126.11 | 113.29 | 97.31 |
| Cash conversion cycle | days | -83.65 | -64.09 | -62.81 | -60.66 | -79.89 | -81.33 | -70.57 | -83.72 | -83.61 | -78.99 | -70.39 | -71.76 | -80.82 | -68.41 | -78.78 | -58.02 | -44.12 | -55.40 | -49.50 | -47.68 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 15.89 + 55.06 – 154.60
= -83.65
The cash conversion cycle for California Water Service Group has shown improvement over the past eight quarters. The company's cash conversion cycle has decreased consistently from Q1 2022 to Q4 2023, indicating increasing efficiency in managing its working capital. The company has been able to convert its inventory into cash at a faster rate, reduce its accounts receivable collection time, and optimize its accounts payable payment period.
The negative values of the cash conversion cycle indicate that the company is able to collect cash from its operations before having to pay its suppliers and other obligations. This suggests that California Water Service Group has a strong liquidity position and efficient working capital management. The decrease in the cash conversion cycle reflects the company's ability to generate cash flows efficiently and effectively.
Overall, the improving trend in the cash conversion cycle signifies that California Water Service Group is managing its working capital efficiently, which can lead to improved financial stability and profitability in the long run.
Peer comparison
Dec 31, 2023