Frontier Communications Parent Inc (FYBR)

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	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	Dec 31, 2018
Days of inventory on hand (DOH)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Days of sales outstanding (DSO)	days	28.31	28.44	27.26	27.15	28.76	26.14	25.28	23.07	25.60	—	27.46	28.21	31.46	32.44	30.67	31.52	32.15	32.56	34.17	34.16
Number of days of payables	days	74.66	42.97	65.21	91.40	98.96	597.33	495.96	198.99	70.60	—	57.78	62.22	—	—	34.74	42.90	20.32	19.05	47.61	44.93
Cash conversion cycle	days	-46.35	-14.52	-37.95	-64.25	-70.20	-571.19	-470.69	-175.92	-45.00	0.00	-30.31	-34.01	31.46	32.44	-4.07	-11.38	11.83	13.51	-13.44	-10.77

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 28.31 – 74.66
= -46.35

The cash conversion cycle of Frontier Communications Parent Inc shows fluctuations over time, indicating the efficiency of the company in managing its working capital. The negative values in recent periods, such as -46.35 days at the end of December 2023 and -14.52 days at the end of September 2023, suggest that the company is effectively converting its inventory and receivables into cash. This signifies that Frontier Communications Parent Inc is able to collect cash from sales and convert it back into cash to pay suppliers within a shorter timeframe, which is a positive indicator of operational efficiency.

However, the cash conversion cycle has shown some volatility in the past, with significant negative values in some periods, such as -571.19 days at the end of September 2022 and -470.69 days at the end of June 2022. These extremely low values may indicate potential issues in managing working capital effectively. Such extended negative cash conversion cycles could imply that the company is holding excess inventory or delaying payments to suppliers excessively, which can lead to inefficiencies and cash flow problems in the long run.

Overall, while the recent negative cash conversion cycle values suggest improved efficiency in managing working capital, it is crucial for Frontier Communications Parent Inc to ensure consistency and sustainability in this aspect to support its financial health and operational performance. Regular monitoring and optimization of the cash conversion cycle will help the company maintain its liquidity and financial stability in the competitive telecommunications industry.