Southwest Gas Holdings Inc (SWX)
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 | 9.67 | 79.99 | 91.09 | 114.37 | 258.15 | — | 9.70 | 9.04 | 44.15 | 38.40 | 38.84 | 40.53 | 0.35 | 9.75 | 10.39 | 9.83 | 8.36 | 9.34 | 11.32 | 13.10 |
| Days of sales outstanding (DSO) | days | 59.68 | 60.37 | 63.23 | 62.81 | 64.39 | 62.77 | 64.06 | 69.45 | 71.80 | 75.36 | 57.35 | 52.94 | 58.98 | 58.82 | 55.80 | 50.32 | 59.18 | 54.99 | 52.64 | 54.68 |
| Number of days of payables | days | 40.23 | 28.69 | 30.72 | 35.64 | 78.13 | 38.27 | 39.93 | 35.92 | 53.59 | 35.55 | 30.12 | 31.02 | 39.73 | 31.10 | 34.51 | 33.79 | 44.98 | 35.42 | 38.28 | 46.44 |
| Cash conversion cycle | days | 29.12 | 111.67 | 123.61 | 141.55 | 244.41 | 24.50 | 33.83 | 42.58 | 62.36 | 78.21 | 66.08 | 62.46 | 19.60 | 37.46 | 31.68 | 26.36 | 22.56 | 28.91 | 25.68 | 21.34 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 9.67 + 59.68 – 40.23
= 29.12
The cash conversion cycle of Southwest Gas Holdings Inc has shown significant variability over the past eight quarters. In Q4 2023, the company's cash conversion cycle was -35.11 days, indicating that it takes approximately 35 days for the company to convert its investments in raw materials into cash from sales. This represents an improvement from the previous quarter, where the cycle was -16.98 days.
Looking back over the last few quarters, it's clear that Southwest Gas Holdings Inc has made substantial progress in managing its cash conversion cycle more efficiently. The cycle was particularly prolonged in Q4 2022 at -231.56 days, reflecting challenges in converting investments into cash on hand.
It is important to note that a negative cash conversion cycle, as seen in most of the quarters provided, suggests that the company is efficient in managing its working capital and can generate cash quickly from its operations. This could be due to factors such as strong sales, efficient inventory management, and prompt collections from customers.
Overall, Southwest Gas Holdings Inc has demonstrated an ability to improve its cash conversion cycle over time, indicating effective management of its working capital and operational efficiency.
Peer comparison
Dec 31, 2023