Cactus Inc (WHD)

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	408.07	672.52	677.25	501.59	611.77
Days of sales outstanding (DSO)	days	77.69	91.28	94.40	55.07	64.72
Number of days of payables	days	162.84	228.23	284.81	138.77	241.86
Cash conversion cycle	days	322.91	535.57	486.84	417.89	434.63

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 408.07 + 77.69 – 162.84
= 322.91

The cash conversion cycle of Cactus Inc has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle decreased to 322.91 days from 535.57 days in 2022, indicating an improvement in managing its cash flow and working capital. This reduction suggests that the company took less time to convert its investments in inventory and accounts receivable into cash during the year.

Comparing to 2021 and 2020, where the cash conversion cycle was 486.84 days and 417.89 days respectively, the cycle in 2023 appears more in line with the earlier years in terms of efficiency in managing its working capital.

However, it is worth noting that the cash conversion cycle in 2019 was slightly lower at 434.63 days compared to 2023, implying that Cactus Inc may have been more effective in managing its cash flow that year.

Overall, the trend in the cash conversion cycle for Cactus Inc shows some variability over the years, with 2023 reflecting a positive improvement compared to 2022, but not as efficient as in 2019. Further analysis of the company's operational and financial activities may provide insights into the factors influencing these fluctuations in the cash conversion cycle.