Dril-Quip Inc (DRQ)

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	230.23	236.03	227.91	208.50	200.39	196.85	198.01	206.64	219.47	289.74	295.86	278.91	287.64	284.17	267.24	242.11	253.71	251.46	246.69	245.31
Days of sales outstanding (DSO)	days	244.44	266.11	274.30	278.83	237.84	234.21	233.59	220.14	230.10	238.46	252.74	253.59	256.54	225.74	218.44	217.30	218.36	281.85	269.40	264.17
Number of days of payables	days	77.73	64.99	75.38	64.43	59.04	65.11	65.53	53.53	53.06	59.53	69.60	55.09	50.65	66.42	74.05	61.21	57.31	57.09	43.98	26.04
Cash conversion cycle	days	396.95	437.15	426.83	422.89	379.19	365.95	366.06	373.26	396.50	468.67	479.00	477.42	493.53	443.50	411.64	398.19	414.76	476.21	472.11	483.44

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 230.23 + 244.44 – 77.73
= 396.95

The cash conversion cycle for Dril-Quip, Inc. has exhibited some fluctuations over the past eight quarters. In Q4 2023, the cash conversion cycle was 396.95 days, showing an improvement from the previous quarter. However, compared to Q4 2022, the cycle has lengthened by approximately 17 days.

Overall, the trend in the cash conversion cycle for Dril-Quip, Inc. has been somewhat erratic, with alternating increases and decreases over the quarters analyzed. This volatility suggests potential challenges in managing the company's cash flow, operating efficiency, and working capital effectiveness.

It is important for Dril-Quip, Inc. to closely monitor and manage its cash conversion cycle to ensure timely collection of receivables, efficient management of inventory, and prudent payment of payables. By optimizing the cash conversion cycle, the company can enhance its liquidity position, reduce financing costs, and improve overall financial performance.