Quanta Services Inc (PWR)
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 | 3.24 | 3.23 | 3.27 | 3.48 | 2.32 | 2.25 | 2.37 | 2.53 | 2.50 | 2.00 | 2.07 | 1.77 | 1.74 | 1.85 | 2.14 | 2.14 | 2.37 | 2.83 | 3.01 | 3.67 |
| Days of sales outstanding (DSO) | days | 77.78 | 81.72 | 81.68 | 76.39 | 79.06 | 80.65 | 83.53 | 86.50 | 96.07 | 91.86 | 80.89 | 87.65 | 88.83 | 88.26 | 73.97 | 78.72 | 83.13 | 96.46 | 82.06 | 66.41 |
| Number of days of payables | days | 37.39 | 39.30 | 35.00 | 29.71 | 29.24 | 31.78 | 32.96 | 35.95 | 36.96 | 30.91 | 29.27 | 29.22 | 27.47 | — | — | — | 33.91 | — | — | — |
| Cash conversion cycle | days | 43.63 | 45.66 | 49.95 | 50.16 | 52.13 | 51.12 | 52.94 | 53.08 | 61.61 | 62.95 | 53.68 | 60.20 | 63.09 | 90.11 | 76.11 | 80.86 | 51.59 | 99.30 | 85.07 | 70.08 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 3.24 + 77.78 – 37.39
= 43.63
The cash conversion cycle of Quanta Services, Inc. has shown a fluctuating trend over the past eight quarters. Typically, a shorter cash conversion cycle indicates that the company is efficiently managing its working capital and converting its inventory and receivables into cash more quickly.
In the most recent quarter, Q4 2023, the cash conversion cycle decreased to 39.43 days from 41.11 days in Q3 2023. This improvement suggests that the company may have streamlined its operations, reduced inventory levels, or accelerated the collection of receivables, leading to a quicker conversion of activities into cash.
Comparing Q4 2023 to the same period in the prior year, Q4 2022, there has been a notable improvement as the cash conversion cycle decreased from 48.47 days to 39.43 days. This significant reduction reflects enhanced efficiency in working capital management and a more effective cash flow system within the organization.
Overall, the decreasing trend in the cash conversion cycle over the past quarters indicates that Quanta Services, Inc. has been making progress in optimizing its working capital and improving its liquidity position. However, it is important for the company to continue monitoring and managing its cash conversion cycle to ensure sustained efficiency in its operations and financial performance.
Peer comparison
Dec 31, 2023