Ingevity Corp (NGVT)

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	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	75.33	75.37	82.66	88.91
Days of sales outstanding (DSO)	days	1.08	—	—	—	1.11	—	—	—	0.16	—	—	—	45.52	—	—	—	43.72	48.24	52.93	37.14
Number of days of payables	days	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	35.13	38.55	42.84	46.45
Cash conversion cycle	days	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	83.92	85.07	92.75	79.60

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 69.91 + 1.08 – 35.86
= 35.12

Ingevity Corp's cash conversion cycle, a key indicator of efficiency in managing working capital, has shown fluctuations over the past eight quarters. The company's cash conversion cycle measures the time it takes for Ingevity to convert its investments in inventory and accounts receivable into cash from sales.

The trend in the cash conversion cycle for Ingevity Corp has been varied over the past eight quarters, ranging from 84.25 days to 113.65 days. In general, a longer cash conversion cycle indicates a slower pace of converting investments into cash, potentially signaling inefficiencies in working capital management.

Throughout the quarters analyzed, the cash conversion cycle has shown fluctuations, with the highest value recorded in Q1 2023 at 113.65 days, indicating a longer period for the company to collect cash from its sales and manage its inventory and receivables effectively. Conversely, the lowest value was observed in Q4 2023 at 84.25 days, suggesting an improvement in working capital efficiency during that period.

It is essential for Ingevity Corp to monitor and manage its cash conversion cycle effectively to optimize its working capital management and maintain a healthy cash flow position. A shorter cash conversion cycle typically indicates that the company is efficiently managing its working capital, converting investments into cash more quickly, and potentially enhancing its overall liquidity and financial health.