RPC Inc (RES)

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	29.29	26.80	33.54	33.20	28.83
Days of sales outstanding (DSO)	days	98.14	128.53	167.35	165.82	96.14
Number of days of payables	days	22.46	31.79	31.60	16.45	15.18
Cash conversion cycle	days	104.97	123.53	169.29	182.57	109.79

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 29.29 + 98.14 – 22.46
= 104.97

The cash conversion cycle of RPC, Inc. has exhibited fluctuations over the past five years.

In 2023, the cash conversion cycle decreased to 93.78 days from 98.51 days in 2022, indicating an improvement in the efficiency of the company's cash management. This reduction suggests that RPC, Inc. was able to convert its investments in inventory and receivables into cash at a quicker pace.

Compared to 2021, where the cash conversion cycle was 136.35 days, the significant decrease in 2023 signifies a more effective management of working capital. RPC, Inc. seemingly enhanced its ability to collect receivables and manage inventory levels more efficiently.

Furthermore, the cash conversion cycle in 2020 was at its highest point in the past five years, at 181.06 days. The substantial decrease to 93.78 days in 2023 indicates a notable improvement in the company's cash management practices.

Overall, the trend of decreasing cash conversion cycles over the past few years implies that RPC, Inc. has been successful in optimizing its working capital and enhancing its cash flow management capabilities. This is a positive indicator of the company's operational efficiency and financial health.