Cactus Inc (WHD)

Cash conversion cycle

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019
Days of inventory on hand (DOH)	days	471.26	415.79	580.08	667.61	931.42	682.90	920.36	895.96	866.71	691.79	716.48	675.48	674.44	521.48	652.66	591.53	594.56	647.00	748.91	801.48
Days of sales outstanding (DSO)	days	76.86	77.69	87.42	100.05	111.79	91.28	96.20	100.30	92.80	94.40	93.97	98.76	89.33	55.07	42.24	36.89	68.34	65.11	58.52	67.01
Number of days of payables	days	152.76	165.93	185.89	202.73	227.22	231.75	352.91	344.87	325.60	290.93	307.49	256.07	167.33	144.27	115.89	86.64	204.36	255.78	274.89	337.50
Cash conversion cycle	days	395.36	327.55	481.62	564.92	815.99	542.44	663.66	651.39	633.90	495.27	502.96	518.17	596.44	432.28	579.01	541.78	458.54	456.32	532.55	530.99

March 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 471.26 + 76.86 – 152.76
= 395.36

The cash conversion cycle of Cactus Inc has exhibited fluctuations over the past few periods. It is a measure of how long it takes for the company to convert its resources invested in inventory into cash flows from sales. A lower cash conversion cycle indicates that the company is able to efficiently manage its working capital.

In the most recent period ending on March 31, 2024, the cash conversion cycle was 395.36 days, showing an increase from the previous quarter but still lower than some earlier periods. This suggests that the company took longer to convert its investments in inventory and receivables into cash compared to the previous quarter.

The trend in the cash conversion cycle shows variability, with some quarters showing longer cycles (such as Sep 30, 2023, and Mar 31, 2023), while others showing shorter cycles (such as Dec 31, 2021, and Sep 30, 2020). This variability may indicate fluctuations in the company's management of inventory, receivables, and payables over time.

Overall, a detailed analysis of the components contributing to the cash conversion cycle, such as days inventory outstanding, days sales outstanding, and days payable outstanding, would be beneficial in understanding the drivers behind these fluctuations and in evaluating the efficiency of Cactus Inc's working capital management strategy.