Oceaneering International Inc (OII)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	37.39	37.80	38.26	34.94	30.98
Days of sales outstanding (DSO)	days	41.64	49.88	52.39	51.35	59.15
Number of days of payables	days	30.45	28.12	30.72	27.82	20.67
Cash conversion cycle	days	48.57	59.56	59.94	58.48	69.47

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 37.39 + 41.64 – 30.45
= 48.57

The cash conversion cycle is a key metric that measures how efficiently a company manages its cash flow related to its operations. Looking at Oceaneering International Inc's cash conversion cycle over the past five years, we can observe a gradual improvement in the company's cash management efficiency.

As of December 31, 2020, the cash conversion cycle stood at 69.47 days. Over the subsequent years, there was a consistent downward trend in the cash conversion cycle, indicating that Oceaneering International Inc was able to optimize its working capital management effectively. By December 31, 2024, the cash conversion cycle had decreased to 48.57 days, reflecting a notable enhancement in the company's cash flow operations.

A lower cash conversion cycle signifies that the company is reducing the time it takes to convert its investments in inventory and receivables into cash from sales. This improvement suggests that Oceaneering International Inc has been able to streamline its processes, manage its inventory levels more efficiently, and collect receivables faster, thereby freeing up cash that can be reinvested or used to strengthen the company's financial position.

Overall, the decreasing trend in Oceaneering International Inc's cash conversion cycle signals enhanced operational efficiency and effective cash flow management, which are essential factors for sustaining and growing the company's financial health in the long run.