Tidewater Inc (TDW)

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	13.93	17.95	9.94	10.73	16.63
Days of sales outstanding (DSO)	days	1.26	—	—	68.41	97.30
Number of days of payables	days	19.61	22.68	16.39	11.48	20.93
Cash conversion cycle	days	-4.41	-4.73	-6.45	67.67	93.00

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 13.93 + 1.26 – 19.61
= -4.41

The cash conversion cycle of Tidewater Inc has shown a trend of improvement over the past five years. In 2019, the company had a significantly high cash conversion cycle of 93.00 days, indicating a lengthy period to convert its investments in inventory and accounts receivable into cash.

However, there has been a notable improvement in the company's efficiency in converting its resources into cash in recent years. By the end of 2023, Tidewater Inc managed to reduce its cash conversion cycle to -4.41 days, which implies that the company is now able to convert its investments into cash faster than before.

The negative values in the cash conversion cycle for 2023, 2022, and 2021 indicate that Tidewater Inc is now able to receive payments from customers and convert inventory into sales faster than it takes to pay off its suppliers. This suggests a more effective management of working capital and liquidity.

Overall, the downward trend in the cash conversion cycle reflects a positive development in Tidewater Inc's operational efficiency and financial performance in recent years, indicating better management of its resources and improved cash flow management.