Heritage Financial Corporation (HFWA)
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 | 76.24 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 1.93 | 2.03 | 2.02 | 2.87 | 4.51 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 76.24 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1.93 | 2.03 | 2.02 | 2.87 | 4.51 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 76.24 + — – —
= 76.24
The cash conversion cycle of Heritage Financial Corp. has shown some fluctuation over the past eight quarters. The company's cash conversion cycle measures the time it takes for the company to convert its investments in inventory and other resources into cash inflows from sales.
In Q4 2023, the cash conversion cycle stood at 23.50 days, a slight increase from the previous quarter. Despite the increase, the company managed to keep the cycle relatively low compared to previous quarters. This indicates that Heritage Financial Corp. is efficiently managing its working capital and converting its assets into cash.
Looking back over the past year, the cash conversion cycle has shown a decreasing trend from Q1 2022 to Q3 2022, reaching its lowest point of 22.00 days in Q1 2022. However, there was a slight increase in Q4 2022 and a more significant increase in Q1 2023, possibly indicating some challenges in managing working capital efficiently during those periods.
Overall, the company's cash conversion cycle has been relatively stable, indicating effective management of inventory, accounts receivable, and accounts payable. Heritage Financial Corp. should continue monitoring and optimizing its working capital to ensure a healthy cash conversion cycle and efficient operations.