One Gas Inc (OGS)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	57.90	66.40	4,786.19	2,956.06	7,454.37
Days of sales outstanding (DSO)	days	53.53	78.41	68.97	69.88	55.21
Number of days of payables	days	86.05	88.92	6,888.48	4,792.61	8,614.86
Cash conversion cycle	days	25.38	55.90	-2,033.32	-1,766.67	-1,105.28

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 57.90 + 53.53 – 86.05
= 25.38

The cash conversion cycle of ONE Gas Inc has fluctuated over the past five years. In 2023, the company's cash conversion cycle improved significantly to 49.25 days, compared to 73.31 days in 2022. This indicates that ONE Gas Inc was able to convert its investments in inventory and accounts receivable into cash more efficiently in 2023.

In the previous years, the company's cash conversion cycle also showed variability, with improvements seen in 2021 and 2020 compared to 2019. However, it worsened in 2022 before rebounding in 2023. Overall, the trend suggests that ONE Gas Inc has been managing its operating cycle more effectively in recent years.

A lower cash conversion cycle indicates that the company is able to generate cash quickly from its operational activities, which can be a positive sign of efficiency and liquidity. However, it is important to continue monitoring this metric to ensure sustained improvement in the company's cash conversion efficiency.