Innospec Inc (IOSP)

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	62.25	68.55	72.03	74.86	78.07	83.92	85.73	78.13	76.52	80.83	79.93	72.37	69.98	72.70	68.74	67.43	66.05	67.63	66.85	67.11
Days of sales outstanding (DSO)	days	67.39	56.70	56.35	62.46	62.19	66.99	71.74	76.27	70.00	80.08	80.98	78.03	67.78	59.13	56.46	72.24	70.44	71.60	68.02	72.28
Number of days of payables	days	33.93	30.21	31.89	36.38	34.59	38.16	42.82	41.02	40.99	40.43	39.41	37.14	31.40	24.80	20.91	29.71	32.94	28.54	31.54	33.38
Cash conversion cycle	days	95.70	95.03	96.50	100.95	105.68	112.75	114.65	113.38	105.53	120.48	121.51	113.26	106.37	107.03	104.29	109.96	103.55	110.69	103.33	106.01

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 62.25 + 67.39 – 33.93
= 95.70

The cash conversion cycle of Innospec Inc has shown a slight improvement in the most recent quarter, decreasing from 105.81 days in Q3 2023 to 104.08 days in Q4 2023. This indicates that the company has been able to more efficiently convert its investments in inventory into cash.

Looking at the trend over the past year, it is evident that the cash conversion cycle has been gradually decreasing, demonstrating improved management of working capital. This is a positive sign for the company's liquidity and operational efficiency.

Innospec Inc's cash conversion cycle ranged from a low of 104.08 days in Q4 2023 to a high of 125.79 days in Q2 2022. This variability indicates that the company may have experienced fluctuations in its working capital management during this period.

Overall, the decreasing trend in the cash conversion cycle suggests that Innospec Inc has been effectively managing its cash flow and working capital, which is vital for sustaining the company's operations and growth.