Shenandoah Telecommunications Co (SHEN)

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	12.87	39.76	—	2,226.43	15.54
Days of sales outstanding (DSO)	days	30.04	64.33	75.08	111.77	44.00
Number of days of payables	days	70.09	86.43	53.79	41.05	109.34
Cash conversion cycle	days	-27.18	17.67	21.29	2,297.15	-49.79

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 12.87 + 30.04 – 70.09
= -27.18

The cash conversion cycle for Shenandoah Telecommunications Co. has exhibited fluctuations over the past five years. It has ranged from negative 153.12 days in 2023 to negative 5.15 days in 2019. A negative cash conversion cycle indicates that the company is efficiently managing its cash flows, as it takes longer for the company to pay its suppliers compared to how quickly it collects cash from its customers and converts inventory into sales.

In 2023, the cash conversion cycle deteriorated significantly to negative 153.12 days, indicating a potential inefficiency in managing working capital. This could be attributed to delays in collecting receivables or managing inventory levels effectively. In contrast, in 2019, the company achieved a negative cash conversion cycle of -5.15 days, indicating a strong position in managing its working capital.

Overall, the company has experienced fluctuations in its cash conversion cycle, suggesting the need for continuous monitoring and improvement in working capital management practices to ensure efficient utilization of cash resources.