NewJersey Resources Corporation (NJR)

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	4,803.67	4,857.58	3,974.41	2,331.86	5,959.41	6,381.11	883.40	173.47	513.58	415.77	514.82	2,939.99	5,663.07	5,916.26	—	—	—	2,846.56	33.15	14.67
Days of sales outstanding (DSO)	days	42.21	14.41	12.04	20.83	37.73	17.51	22.83	28.95	30.52	21.38	18.02	25.77	28.74	16.61	27.03	40.16	47.90	20.04	23.57	39.86
Number of days of payables	days	2,259.37	3,255.00	2,613.87	2,617.03	2,385.43	3,398.85	506.29	242.40	329.66	435.92	573.67	3,959.26	3,434.69	4,455.06	—	—	—	2,003.86	21.89	18.51
Cash conversion cycle	days	2,586.51	1,616.99	1,372.59	-264.35	3,611.71	2,999.77	399.94	-39.99	214.44	1.23	-40.83	-993.50	2,257.11	1,477.81	27.03	40.16	47.90	862.74	34.83	36.02

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 4,803.67 + 42.21 – 2,259.37
= 2,586.51

The cash conversion cycle of New Jersey Resources Corporation has shown some fluctuations over the past few quarters. In Q1 2024, the cash conversion cycle was 166.08 days, indicating a lengthening of the cycle compared to the previous quarter. This suggests that the company took longer to convert its investments in raw materials into cash receipts from sales. The increase in the cash conversion cycle may indicate inefficiencies in managing inventory, collecting receivables, or paying suppliers.

In Q4 2023, the cash conversion cycle improved to 104.72 days, which may imply better management of working capital. The cycle further decreased in Q3 2023 to 66.75 days, reaching its lowest point in the provided data. This improvement indicates that the company was able to convert its investments into cash more efficiently during this period.

During Q2 2023, the cash conversion cycle increased slightly to 55.17 days, possibly due to changes in operating activities or cash flow management. In Q1 2023, the cycle was higher at 109.53 days, indicating a longer time period needed to complete the cash conversion process compared to the previous quarter.

Looking back at Q4 2022, the cash conversion cycle was at 82.48 days, showing improvement from Q3 2022 when it was 81.14 days. However, the cycle decreased significantly in Q2 2022 to 64.17 days, suggesting efficient management of working capital and cash flow during that period.

Overall, the fluctuations in the cash conversion cycle of New Jersey Resources Corporation indicate varying levels of efficiency in managing its working capital and cash flow over the analyzed quarters. It is crucial for the company to monitor and address factors impacting the cash conversion cycle to optimize its operational and financial performance.