UNITIL Corporation (UTL)

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	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	49.38	46.92	43.52	45.05
Days of sales outstanding (DSO)	days	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	25.91	21.12	22.29	30.70
Number of days of payables	days	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	235.00	139.54	127.08	190.59
Cash conversion cycle	days	-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	-159.72	-71.50	-61.27	-114.84

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 15.20 + 28.54 – 53.70
= -9.96

Unitil Corp.'s cash conversion cycle has exhibited fluctuations over the past eight quarters. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash received from sales.

In Q4 2023, the cash conversion cycle decreased to 14.70 days, indicating an improvement in the company's efficiency in converting its investments into cash compared to the previous quarter. This may be attributed to better inventory management or quicker accounts receivable collection during this period.

However, the cash conversion cycle increased in Q3 2023 to 20.82 days, suggesting a slowdown in Unitil Corp.'s cash conversion process. This could be due to factors such as a buildup of inventory or slower collections from customers during this period.

Looking at the broader trend, the company experienced a relatively stable cash conversion cycle in the previous quarters of 2023, compared to the significant fluctuations seen in 2022. Despite some variations, Unitil Corp. has generally maintained a positive cash conversion cycle, indicating effective management of its working capital and cash flow.

Overall, monitoring and managing the cash conversion cycle is crucial for Unitil Corp. to ensure efficient operations and liquidity management. The company should continue to focus on optimizing inventory levels, accelerating accounts receivable collections, and extending accounts payable payment terms to improve its cash conversion efficiency in the future.