Caterpillar Inc (CAT)
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 | 141.38 | 147.97 | 150.69 | 153.63 | 143.62 | 154.86 | 151.93 | 148.11 | 144.28 | 149.82 | 146.39 | 148.67 | 143.10 | 137.44 | 129.44 | 122.89 | 112.26 | 118.55 | 115.47 | 120.32 |
| Days of sales outstanding (DSO) | days | 102.44 | 102.74 | 105.40 | 108.55 | 109.75 | 110.06 | 116.97 | 125.69 | 124.42 | 124.91 | 138.10 | 146.75 | 146.71 | 133.23 | 48.56 | 54.75 | 51.89 | 47.49 | 51.53 | 52.23 |
| Number of days of payables | days | 67.47 | 65.88 | 71.69 | 77.99 | 76.70 | 75.87 | 77.41 | 82.35 | 83.81 | 79.13 | 79.95 | 81.91 | 76.91 | 62.32 | 57.86 | 60.35 | 59.36 | 59.77 | 67.53 | 70.18 |
| Cash conversion cycle | days | 176.34 | 184.83 | 184.40 | 184.19 | 176.67 | 189.06 | 191.48 | 191.45 | 184.90 | 195.60 | 204.53 | 213.50 | 212.90 | 208.35 | 120.14 | 117.29 | 104.79 | 106.27 | 99.47 | 102.37 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 141.38 + 102.44 – 67.47
= 176.34
The cash conversion cycle of Caterpillar Inc. has shown some fluctuation over the past eight quarters. In Q4 2023, the company's cash conversion cycle decreased to 124.57 days compared to 132.16 days in Q3 2023. This indicates that Caterpillar was able to convert its investments in inventory back to cash more rapidly in the most recent quarter.
Looking back further, the cash conversion cycle was slightly lower in Q4 2022 at 121.31 days, indicating an improvement compared to Q4 2023. However, the company faced challenges in Q3 and Q2 2022 with cash conversion cycles of 131.57 days and 131.21 days, respectively. This suggests that Caterpillar struggled to efficiently manage its cash flow during those periods.
Overall, the trend in Caterpillar's cash conversion cycle has been somewhat fluctuating, with some quarters showing improvements while others indicate challenges in converting inventory into cash. It is essential for the company to consistently monitor its cash conversion cycle to ensure optimal working capital management and operational efficiency.
Peer comparison
Dec 31, 2023