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.