Carpenter Technology Corporation (CRS)

Cash conversion cycle

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Days of inventory on hand (DOH)	days	137.41	123.39	105.51	107.37	105.37
Days of sales outstanding (DSO)	days	73.01	74.41	76.04	75.99	76.36
Number of days of payables	days	46.29	44.28	45.87	52.40	35.25
Cash conversion cycle	days	164.13	153.52	135.68	130.96	146.48

June 30, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 137.41 + 73.01 – 46.29
= 164.13

The provided data indicates the evolution of Carpenter Technology Corporation’s cash conversion cycle (CCC) over a four-year period, measured as of June 30th for each fiscal year.

In the fiscal year ending June 30, 2021, the CCC was approximately 146.48 days. This figure decreased notably in the subsequent year, reaching approximately 130.96 days as of June 30, 2022. The reduction suggests an improvement in the company's operational efficiency, with a shorter period to convert investments in inventory and receivables into cash flows. However, in the following year ending June 30, 2023, the CCC increased slightly again to approximately 135.68 days, indicating a marginal slowdown or adjustments in the operational cycle.

From June 30, 2023, to June 30, 2024, the cycle lengthened further to approximately 153.52 days, and this upward trend continued into the fiscal year ending June 30, 2025, where the CCC reached approximately 164.13 days. The increasing trend over this latter period suggests a lengthening of the time taken to convert working capital into cash, which could be attributable to factors such as extended inventory holding periods, longer collection times from customers, or delays in receivables turnover.

Overall, the pattern shows a significant reduction in the cash conversion cycle from 2021 to 2022, followed by a gradual and then more pronounced increase through 2023 to 2025. The subsequent elongation of the CCC could indicate a shift towards increased working capital requirements or potential challenges in inventory management and receivables collection processes. The trend highlights a period of operational efficiency improvement, succeeded by a phase of cycle lengthening that warrants further analysis to determine underlying causes and potential impacts on liquidity and financial flexibility.