NiSource Inc (NI)

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	95.75	87.07	70.65	54.69	111.30	130.98	84.60	48.85	104.49	148.88	105.79	74.63	122.37	91.61	75.02	65.59	101.00	100.35	70.16	45.85
Days of sales outstanding (DSO)	days	65.31	39.39	41.25	61.99	71.20	42.51	53.14	74.47	68.75	50.27	54.61	77.44	108.38	36.10	37.57	48.89	78.51	34.09	55.35	72.05
Number of days of payables	days	142.60	104.23	109.70	93.33	133.15	109.11	111.91	116.66	146.20	153.87	153.58	168.21	179.69	94.80	96.84	130.57	158.39	110.68	121.61	143.52
Cash conversion cycle	days	18.46	22.23	2.21	23.35	49.35	64.38	25.83	6.67	27.04	45.28	6.81	-16.13	51.05	32.91	15.75	-16.08	21.13	23.75	3.91	-25.62

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 95.75 + 65.31 – 142.60
= 18.46

The cash conversion cycle of NiSource Inc has exhibited fluctuations over the past eight quarters. During Q4 2023, the company's cash conversion cycle was at 2.92 days, indicating that on average, it takes approximately 2.92 days for NiSource Inc to convert its investments in inventory and other resources into cash receipts from customers. This suggests an efficient management of working capital during this period.

In contrast, the cash conversion cycle in Q3 2023 spiked to 17.67 days, indicating a significant increase in the time it takes for NiSource Inc to convert its investments into cash receipts. This may be attributed to delays in inventory turnover or slower collections from customers.

The negative cash conversion cycle in Q2 2023 (-5.47 days) suggests that NiSource Inc was able to generate cash from sales before needing to pay suppliers for inventory, a desirable situation that can indicate strong liquidity and efficient working capital management.

Comparing these figures to previous quarters, we observe that Q4 2022 had a notably longer cash conversion cycle of 47.47 days, which improved in subsequent quarters. This reduction in the cash conversion cycle could indicate improvements in inventory management and/or faster collection of receivables.

Overall, the trend in NiSource Inc’s cash conversion cycle fluctuates, reflecting varying efficiencies in managing working capital components. It is important for the company to focus on reducing the cycle time to enhance liquidity, optimize cash flow, and improve overall financial performance.