Otter Tail Corporation (OTTR)

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	107.03	105.39	97.93	110.07	6,528.28
Days of sales outstanding (DSO)	days	40.59	43.06	36.27	53.88	48.43
Number of days of payables	days	81.64	66.48	70.05	100.13	8,543.68
Cash conversion cycle	days	65.97	81.97	64.16	63.81	-1,966.97

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 107.03 + 40.59 – 81.64
= 65.97

The cash conversion cycle of Otter Tail Corporation has fluctuated over the years, showing a negative value of -1,966.97 days as of December 31, 2020, which may indicate very efficient management of cash resources. However, this was followed by a significant improvement with 63.81 days as of December 31, 2021, suggesting a quicker turnaround of cash within the business operations.

Subsequently, there was a slight increase in the cash conversion cycle to 64.16 days as of December 31, 2022, and further to 81.97 days as of December 31, 2023, potentially pointing towards a lengthening period required to convert investments in inventory and receivables into cash.

Finally, as of December 31, 2024, the cash conversion cycle decreased to 65.97 days, indicating a partial reversal of the previous trend and a potential improvement in the efficiency of managing working capital.

Overall, the cash conversion cycle of Otter Tail Corporation has shown fluctuations, with a mix of positive and negative trends over the analyzed period, which may warrant further investigation into the company's operational and financial performance.