Bristow Group Inc (VTOL)

Cash conversion cycle

Dec 31, 2023 Dec 31, 2022 Mar 31, 2022 Mar 31, 2021 Dec 31, 2019
Days of inventory on hand (DOH) days 135.23 5,762.17 107.44 83.36 165.03
Days of sales outstanding (DSO) days 58.63 0.55 0.81 4.39
Number of days of payables days 119.01 6,305.70 83.53 62.89
Cash conversion cycle days 74.85 -543.52 24.47 21.28 169.42

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 135.23 + 58.63 – 119.01
= 74.85

The cash conversion cycle of Bristow Group Inc has exhibited significant fluctuations over the past few years. In 2019, the company had a relatively long cash conversion cycle of 169.42 days, indicating that it took a considerable amount of time to convert its investments in inventory and accounts receivable into cash inflows. This may suggest inefficiencies in managing working capital during that period.

However, by March 2021, the cash conversion cycle had improved to 21.28 days, reflecting a more efficient management of inventory and accounts receivable, leading to a quicker conversion of these assets into cash. This improvement continued into March 2022, where the cycle further decreased to 24.47 days, indicating continued efficiency in the company's working capital management.

The most recent data available at December 31, 2022, shows a significant negative cash conversion cycle of -543.52 days. A negative cash conversion cycle typically indicates that the company is able to collect cash from customers before paying its suppliers, resulting in a favorable position where it has cash on hand even without utilizing its own resources. While this may signal a strong cash position, it could also indicate aggressive credit terms with suppliers that may not be sustainable in the long term.

By December 31, 2023, the cash conversion cycle increased to 74.85 days, moving back into positive territory. This reversal may signal potential challenges in managing working capital efficiently.

Overall, Bristow Group has experienced fluctuations in its cash conversion cycle over the years, indicating varying levels of efficiency in converting investments in inventory and accounts receivable into cash inflows. Monitoring and managing this cycle effectively is crucial for maintaining financial health and optimizing cash flow management within the company.