Ingevity Corp (NGVT)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	48.78	69.90	91.55	80.63	73.03
Days of sales outstanding (DSO)	days	0.47	1.08	1.11	0.16	47.10
Number of days of payables	days	20.32	35.86	47.77	42.05	40.26
Cash conversion cycle	days	28.92	35.12	44.90	38.74	79.87

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 48.78 + 0.47 – 20.32
= 28.92

The cash conversion cycle of Ingevity Corp has shown a trend of improvement over the years, decreasing from 79.87 days as of December 31, 2020, to 28.92 days as of December 31, 2024. This indicates that the company has been able to efficiently manage its working capital and convert its investments into cash more rapidly.

A lower cash conversion cycle is generally a positive sign as it suggests that the company is able to collect cash from its sales, pay its suppliers, and manage its inventory effectively. Ingevity Corp's decreasing trend in the cash conversion cycle implies that the company has been able to streamline its operations, reduce its inventory holding period, and accelerate its collections from customers.

Overall, a decreasing cash conversion cycle for Ingevity Corp reflects improved working capital management and efficiency in converting its resources into cash, which can enhance the company's liquidity position and potentially drive profitability.