Helmerich and Payne Inc (HP)
Cash conversion cycle
| 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 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 22.63 | 22.35 | 20.84 | 19.32 | 17.68 | 18.99 | 19.20 | 18.66 | 19.65 | 20.85 | 21.98 | 24.00 | 25.17 | 30.37 | 33.97 | 20.92 | 19.56 | 11.50 | 11.37 | 20.63 |
| Days of sales outstanding (DSO) | days | 55.43 | 55.69 | 57.32 | 56.21 | 51.36 | 57.70 | 71.84 | 79.00 | 81.32 | 81.98 | 77.44 | 74.58 | 68.56 | 78.74 | 71.55 | 60.66 | 39.63 | 49.80 | 75.05 | 68.42 |
| Number of days of payables | days | 25.94 | 30.80 | 30.77 | 29.97 | 24.56 | 28.43 | 30.92 | 29.97 | 28.36 | 29.05 | 27.65 | 29.98 | 21.56 | 21.53 | 22.51 | 9.81 | 6.85 | 3.68 | 14.64 | 17.01 |
| Cash conversion cycle | days | 52.12 | 47.25 | 47.39 | 45.56 | 44.49 | 48.26 | 60.12 | 67.68 | 72.61 | 73.78 | 71.78 | 68.60 | 72.17 | 87.58 | 83.02 | 71.77 | 52.35 | 57.62 | 71.78 | 72.04 |
September 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 22.63 + 55.43 – 25.94
= 52.12
The cash conversion cycle of Helmerich and Payne Inc has shown fluctuations over the past several quarters. Specifically, from December 2019 to September 2024, the cash conversion cycle ranged from a low of 44.49 days to a high of 87.58 days.
In general, a lower cash conversion cycle is favorable as it indicates that the company is efficient in converting its investments in inventory into cash. From December 2019 to September 2020, there was a noticeable decrease in the cash conversion cycle, which suggests improved efficiency in managing inventory and collecting receivables.
However, from September 2020 to September 2022, the trend reversed as the cash conversion cycle steadily increased, reaching a peak of 73.78 days in September 2022. This prolonged cycle may indicate challenges in inventory management or slow collections from customers.
Subsequently, there was a slight improvement in the cash conversion cycle from September 2022 to September 2024, although it remained above 50 days. This improvement could be attributed to enhanced working capital practices or better management of operating expenses.
Overall, close monitoring of the cash conversion cycle is essential for Helmerich and Payne Inc to ensure efficient utilization of resources and to optimize cash flow management in the future.
Peer comparison
Sep 30, 2024