UNITIL Corporation (UTL)

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 15.50 14.80 14.72 17.36 15.20 12.73 12.75 10.87 10.56 9.90 9.77 9.49 10.08 14.27 14.88 16.85 15.69 15.69 17.34 23.85
Days of sales outstanding (DSO) days 31.16 24.86 24.48 31.54 28.54 22.76 21.64 30.67 30.51 26.55 23.95 29.36 29.50 23.71 23.75 32.81 30.12 24.89 23.79 29.33
Number of days of payables days 54.26 38.83 38.55 47.00 53.70 35.96 36.28 40.58 63.52 34.50 34.55 39.36 61.40 48.97 56.42 52.56 61.26 46.34 46.54 68.70
Cash conversion cycle days -7.60 0.83 0.65 1.90 -9.96 -0.47 -1.89 0.95 -22.45 1.95 -0.82 -0.51 -21.83 -10.98 -17.79 -2.90 -15.46 -5.76 -5.42 -15.52

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 15.50 + 31.16 – 54.26
= -7.60

The cash conversion cycle of UNITIL Corporation has exhibited some fluctuations over the periods analyzed. The company's cash conversion cycle represents the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales. A negative cash conversion cycle indicates that the company is able to generate cash from its sales before having to pay its suppliers, which can be a favorable position.

Looking at the data provided, UNITIL Corporation had a consistently negative cash conversion cycle from March 2020 to March 2023, with fluctuations in the number of days. This suggests that during this period, the company was efficient in managing its working capital and converting its resources into cash quickly.

However, from September 2022 to December 2024, the cash conversion cycle turned positive, indicating a shift in the company's working capital management. It went from -22.45 days in December 2022 to 0.83 days in September 2024. This change could imply that the company may be taking longer to convert its investments into cash compared to the prior periods.

Overall, it is essential for UNITIL Corporation to monitor its cash conversion cycle closely to ensure efficient working capital management and to optimize its cash flow operations. A negative cash conversion cycle is generally viewed favorably as it signifies efficient cash management, while a positive cash conversion cycle may raise concerns about liquidity and operational efficiency. Monitoring and possibly improving the cash conversion cycle could help UNITIL Corporation enhance its financial performance and sustainability.