SJW Corporation (SJW)

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	—	42.28	39.32	41.95	7.92	10.94	7.48	10.17	9.52	13.34	9.81	12.34	10.82	—	—	—	5.06	—	—	—
Days of sales outstanding (DSO)	days	65.94	74.59	64.81	58.78	64.95	77.29	69.68	61.28	65.19	74.13	66.67	57.21	62.10	73.45	74.28	58.70	68.78	63.92	53.82	38.51
Number of days of payables	days	34.12	27.20	28.66	20.86	24.03	25.12	22.84	24.30	26.60	32.72	34.84	23.02	30.59	29.45	21.99	23.84	35.29	30.66	30.62	25.20
Cash conversion cycle	days	31.81	89.67	75.47	79.87	48.85	63.11	54.32	47.15	48.11	54.75	41.64	46.52	42.33	44.01	52.29	34.85	38.56	33.26	23.21	13.31

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 65.94 – 34.12
= 31.81

The cash conversion cycle of SJW Group shows variability over the quarters analyzed. The trend indicates that the company's ability to efficiently convert its resources into cash fluctuates. In Q3 and Q1 of 2023, the company took longer to convert its investments in inventory and accounts receivable into cash, leading to a positive cash conversion cycle. This could suggest potential liquidity challenges during those periods. However, in Q4 and Q2 of 2023, the company managed to improve its cash conversion cycle significantly, even achieving negative days in Q4 2023, indicating efficiency in managing working capital and converting it into cash quickly. Overall, SJW Group should focus on sustaining the improvements seen in the recent quarters to optimize its cash conversion cycle and enhance its liquidity position.