Sensient Technologies Corporation (SXT)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Days of inventory on hand (DOH)	days	160.16	153.87	149.07	156.75	167.13	168.75	169.93	205.90	267.09	341.49	567.79	510.30	499.70	460.62	428.38	457.45	485.76	689.14	670.61	649.62
Days of sales outstanding (DSO)	days	68.30	72.71	77.78	75.37	69.44	72.54	76.64	79.61	77.52	74.02	77.16	75.54	69.70	70.72	70.39	70.77	64.88	62.45	64.85	67.06
Number of days of payables	days	37.10	31.59	28.88	28.90	36.62	31.90	34.46	43.53	67.41	90.52	176.78	138.62	152.37	145.50	137.14	132.19	136.71	160.65	167.88	154.62
Cash conversion cycle	days	191.36	194.99	197.97	203.22	199.95	209.39	212.11	241.97	277.20	324.99	468.17	447.22	417.03	385.84	361.63	396.03	413.93	590.94	567.58	562.06

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 160.16 + 68.30 – 37.10
= 191.36

The cash conversion cycle of Sensient Technologies Corporation has shown fluctuations over the reported periods. In the most recent quarter ending December 31, 2024, the cash conversion cycle stands at 191.36 days, indicating the number of days it takes for the company to convert its investments in inventory and other resources into cash flows from sales.

The trend in the cash conversion cycle has generally been decreasing since the beginning of the data series in March 2020, suggesting an improvement in the company's working capital management efficiency. A lower cash conversion cycle signifies that Sensient Technologies is able to generate cash faster and more efficiently from its operations.

It is worth noting that the cash conversion cycle reached its peak at 590.94 days in September 30, 2020. The subsequent quarters witnessed a significant reduction in the cycle duration, reflecting enhanced operational effectiveness and possibly streamlined inventory management processes.

The recent trend of the cash conversion cycle stabilizing around the range of 190-210 days indicates that Sensient Technologies has been able to maintain a healthy balance between managing its inventory levels, collecting receivables, and settling payables in a timely manner. This demonstrates the company's ability to effectively manage its working capital and liquidity position.

Overall, the decreasing trend and stable range of the cash conversion cycle for Sensient Technologies Corporation suggest a positive outlook in terms of efficiently managing its operational cash flows and working capital requirements.