Ecolab Inc (ECL)

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	40.64	42.14	45.80	48.77	51.43	52.82	51.84	49.88	48.59	46.21	48.80	47.57	42.98	40.78	36.93	43.08	30.46	44.81	45.95	46.63
Days of sales outstanding (DSO)	days	71.37	72.56	73.34	71.60	73.29	74.84	75.46	73.33	74.66	73.90	74.83	76.81	72.15	69.74	62.43	73.49	72.05	71.05	72.10	70.64
Number of days of payables	days	42.52	41.12	41.08	41.50	49.58	46.42	45.94	44.67	45.08	41.48	41.74	39.84	38.81	35.10	32.69	36.03	30.28	35.85	36.70	35.07
Cash conversion cycle	days	69.50	73.58	78.05	78.87	75.14	81.24	81.36	78.54	78.17	78.63	81.89	84.53	76.31	75.42	66.67	80.54	72.22	80.01	81.36	82.20

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 40.64 + 71.37 – 42.52
= 69.50

The cash conversion cycle for Ecolab, Inc. over the past eight quarters has shown some fluctuations. In Q4 2023, the cash conversion cycle was 69.22 days, indicating that on average, it took Ecolab 69.22 days to convert its investments in inventory and other resources into cash receipts from customers. This was an improvement from the previous quarter but still higher than the Q4 2022 figure of 76.82 days.

In general, Ecolab seems to have been managing its working capital more efficiently in recent quarters, as evidenced by the downward trend in the cash conversion cycle. However, spikes in the cycle in Q2 and Q3 2022 and Q1 2023 may suggest temporary disruptions or challenges in the company's operations or customer payment cycles.

Overall, a lower cash conversion cycle indicates that Ecolab is able to generate cash more quickly from its operating activities, which can be a positive sign of operational efficiency and liquidity. Monitoring the cash conversion cycle over time can provide insights into the company's working capital management and financial health.