Middlesex Water Company (MSEX)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	21.93	46.64	45.31	46.21	52.72
Days of sales outstanding (DSO)	days	65.19	55.89	60.75	58.95	54.78
Number of days of payables	days	86.87	187.62	178.66	275.21	225.65
Cash conversion cycle	days	0.25	-85.09	-72.59	-170.05	-118.15

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 21.93 + 65.19 – 86.87
= 0.25

The cash conversion cycle of Middlesex Water Co. has shown a slight increase over the past five years, indicating a lengthening time period required to convert company resources into cash. This cycle increased from 51.77 days in 2019 to 60.30 days in 2023. The rise in the cash conversion cycle signifies a potential slowdown in the company's ability to effectively manage its working capital, including inventory, accounts receivable, and accounts payable. It is essential for the company to closely monitor and potentially improve its cash conversion cycle to ensure efficient operations and optimal cash flow management in the future.