ProPetro Holding Corp (PUMP)

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	4.52	4.88	5.69	5.41	1.56	1.50	1.34	0.94	1.44	1.34	1.02	0.89	1.15	2.42	3.60	4.19	3.46	3.05	9.40	13.05
Days of sales outstanding (DSO)	days	53.00	56.62	57.62	71.98	58.96	66.28	61.57	64.03	54.18	70.79	77.32	74.41	40.08	32.98	16.45	43.26	38.20	49.87	70.97	70.89
Number of days of payables	days	41.17	59.75	68.37	75.09	72.47	71.49	65.24	62.30	55.60	64.54	52.43	41.46	33.45	93.86	40.10	252.25	274.26	410.93	541.07	609.27
Cash conversion cycle	days	16.34	1.75	-5.06	2.30	-11.95	-3.70	-2.34	2.68	0.02	7.59	25.91	33.84	7.79	-58.45	-20.05	-204.80	-232.60	-358.00	-460.70	-525.33

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 4.52 + 53.00 – 41.17
= 16.34

The cash conversion cycle of ProPetro Holding Corp has fluctuated significantly over the recent quarters, ranging from negative to positive values. A positive cash conversion cycle indicates that the company is taking longer to convert its investments in inventory and other resources back into cash inflows, while a negative cycle suggests a more efficient process.

In the most recent quarter, the company's cash conversion cycle was 16.34 days, indicating that it took approximately 16 days to convert its investments in resources back into cash. This represents an improvement compared to the previous quarter, where the cycle was only 1.75 days, reflecting a faster conversion process. However, it is important to note that the cycle was negative in the two preceding quarters, implying a very efficient conversion of resources into cash during those periods.

Overall, the company's cash conversion cycle has shown variability, with some quarters being more efficient than others. It is essential for the company to manage its working capital effectively to ensure a healthy cash conversion cycle and maximize cash flow efficiency.