Ingevity Corp (NGVT)

Cash conversion cycle

		Dec 31, 2024	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
Days of inventory on hand (DOH)	days	48.78	48.77	56.72	71.23	69.91	97.88	97.94	96.38	91.55	80.63	84.75	83.16	80.63	78.99	77.90	77.20	73.02	79.55	84.08	85.81
Days of sales outstanding (DSO)	days	0.47	—	—	—	1.08	—	—	—	1.11	—	—	—	0.16	—	—	—	45.52	—	—	—
Number of days of payables	days	20.32	18.03	26.74	33.50	35.86	49.94	51.51	46.38	47.77	47.09	51.49	41.19	42.05	44.08	41.98	42.91	40.26	33.07	29.61	38.15
Cash conversion cycle	days	28.92	30.74	29.98	37.73	35.12	47.94	46.43	50.01	44.90	33.53	33.26	41.96	38.74	34.91	35.92	34.29	78.28	46.48	54.48	47.66

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 for Ingevity Corp has fluctuated over the periods provided.

From March 31, 2020, to December 31, 2020, the cash conversion cycle increased from 47.66 days to 78.28 days, indicating a longer period for the company to convert its investments in inventory and other resources into cash.

However, from March 31, 2021, to December 31, 2024, the trend reversed, showing a decline in the cash conversion cycle from 34.29 days to 28.92 days. This downward trend suggests an improvement in the efficiency of the company's operations in converting its resources into cash.

Overall, a decreasing trend in the cash conversion cycle is indicative of better management of working capital and more efficient operations in terms of inventory turnover, accounts receivable collection, and accounts payable payment. This efficiency is crucial for maintaining liquidity and optimizing the company's cash flow.