Hubbell Inc (HUBB)

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	68.88	66.27	66.46	65.45	62.51	63.91	63.12	62.54	59.13	63.32	59.31	60.65	51.66	56.61	57.43	53.89	57.36	59.39	59.65	60.15
Days of sales outstanding (DSO)	days	53.73	59.79	57.57	56.48	55.28	61.00	60.80	61.76	54.55	65.38	63.96	62.17	48.78	61.74	54.41	56.57	54.66	62.43	62.95	57.80
Number of days of payables	days	46.60	46.63	46.43	45.78	44.72	49.29	48.31	48.39	47.59	44.45	43.27	41.45	33.27	37.52	33.69	32.42	31.51	37.21	38.63	36.63
Cash conversion cycle	days	76.01	79.43	77.60	76.15	73.08	75.63	75.61	75.90	66.09	84.25	80.00	81.36	67.17	80.84	78.16	78.04	80.51	84.62	83.97	81.32

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 68.88 + 53.73 – 46.60
= 76.01

The cash conversion cycle measures how efficiently a company manages its cash flow by evaluating the time it takes to convert its investments in inventory into cash receipts from sales. In the case of Hubbell Inc., the cash conversion cycle has fluctuated over the past eight quarters.

In Q4 2023, the cash conversion cycle improved to 81.57 days from 84.07 days in the previous quarter, indicating a more efficient management of working capital. This was a positive trend following a slight increase in the cycle in Q3 2023.

Comparing the latest quarter to the same period last year, there has been an overall increase in the cash conversion cycle. However, the company saw fluctuations throughout the year, with higher values in Q3 and Q2 2022 compared to the more favorable Q4 2022 and Q1 2022.

Overall, Hubbell Inc. should continue to focus on optimizing its cash conversion cycle to improve efficiency in managing its working capital and maximizing cash flow generation.