Chart Industries Inc (GTLS)

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	69.24	86.58	107.39	128.12	86.05	89.14	93.87	96.02	93.19	104.98	101.38	92.67	79.25	73.32	71.72	67.59	60.81	72.01	75.51	76.82
Days of sales outstanding (DSO)	days	91.33	106.58	131.23	159.43	117.42	65.54	69.87	67.29	65.96	69.72	67.98	58.39	61.57	48.93	51.62	54.47	57.74	66.71	65.12	50.74
Number of days of payables	days	97.44	101.88	119.10	142.66	50.76	51.39	55.19	50.70	50.99	55.37	55.71	50.26	44.70	33.24	31.91	34.54	34.98	37.00	37.62	39.64
Cash conversion cycle	days	63.13	91.28	119.52	144.89	152.72	103.29	108.55	112.62	108.16	119.33	113.65	100.80	96.12	89.02	91.43	87.52	83.57	101.71	103.01	87.92

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 69.24 + 91.33 – 97.44
= 63.13

Chart Industries Inc's cash conversion cycle has exhibited fluctuating trends over the past 8 quarters. In Q1 2022, the company had a relatively shorter cash conversion cycle of 157.03 days, which subsequently increased in the following quarters, peaking in Q1 2023 at 212.72 days. This implies that, on average, it took Chart Industries Inc over 200 days to convert its investments in inventory and other resources into cash receipts from customers during that quarter.

However, there was a notable improvement in the cash conversion cycle in Q4 2023, decreasing to 98.02 days. This reduction suggests that the company was able to manage its working capital more effectively in the most recent quarter, potentially by optimizing inventory levels and accelerating collections from customers.

Overall, it is important for Chart Industries Inc to closely monitor and manage its cash conversion cycle to ensure efficient utilization of resources and liquidity management. Reductions in the cash conversion cycle can indicate improved operational efficiency and financial health, while prolonged cycles may signal inefficiencies that could impact the company's overall performance and profitability.