Chart Industries Inc (GTLS)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 51.64 | 56.88 | 50.55 | 46.17 | 58.21 | 69.91 | 102.22 | 166.28 | 108.41 | 110.15 | 117.20 | 120.81 | 118.12 | 135.14 | 131.23 | 121.38 | 104.60 | 96.47 | 94.42 | 88.60 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 51.64 | 56.88 | 50.55 | 46.17 | 58.21 | 69.91 | 102.22 | 166.28 | 108.41 | 110.15 | 117.20 | 120.81 | 118.12 | 135.14 | 131.23 | 121.38 | 104.60 | 96.47 | 94.42 | 88.60 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 51.64 + — – —
= 51.64
The cash conversion cycle is a measure of the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle is generally more favorable as it indicates that the company is able to efficiently manage its working capital.
Analyzing the data provided for Chart Industries Inc, we observe fluctuations in the cash conversion cycle over the periods reported. The cycle started at 88.60 days as of March 31, 2020, increased to 135.14 days by September 30, 2021, and then decreased to 46.17 days by March 31, 2024. This trend signifies variability in the company's ability to manage its working capital effectively.
It is important to note that a higher cash conversion cycle could indicate inefficiencies in inventory management, slow collection of receivables, or delays in paying suppliers. Conversely, a lower cash conversion cycle may suggest improved inventory turnover, quicker collection of receivables, and efficient management of payables.
Overall, monitoring the cash conversion cycle over time can provide insights into Chart Industries Inc's operational efficiency, liquidity position, and working capital management strategies. A decreasing trend in the cycle may be seen as positive, while an increasing trend may warrant closer scrutiny to identify areas for improvement in the company's cash flow management.