Carpenter Technology Corporation (CRS)

Cash conversion cycle

Jun 30, 2025 Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 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
Days of inventory on hand (DOH) days 137.41 138.68 136.02 125.31 123.73 131.84 128.46 113.50 105.51 125.53 137.50 125.47 107.36 117.34 127.78 120.60 105.37 135.26 130.39 136.14
Days of sales outstanding (DSO) days 73.01 75.34 71.70 73.53 74.41 69.96 68.12 69.59 76.04 79.87 74.80 72.23 75.99 72.43 71.96 75.33 76.36 68.34 48.74 46.91
Number of days of payables days 46.29 43.44 43.96 45.70 44.40 45.58 50.46 50.67 45.87 50.89 57.97 58.65 52.39 47.69 40.70 52.03 35.25 34.12 25.01 24.53
Cash conversion cycle days 164.13 170.59 163.77 153.14 153.74 156.23 146.11 132.42 135.69 154.51 154.33 139.05 130.95 142.08 159.05 143.90 146.48 169.47 154.11 158.53

June 30, 2025 calculation

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

The analysis of Carpenter Technology Corporation's cash conversion cycle (CCC) across the provided period reveals notable fluctuations, indicating variations in the company's liquidity management and operational efficiency.

Starting from September 30, 2020, the CCC was approximately 158.53 days, which then decreased slightly to 154.11 days by December 31, 2020. The following quarter saw an increase to 169.47 days, suggesting a lengthening in the overall cycle, possibly due to delays in receivables collection, inventory turnover, or extended payables.

Throughout 2021, the CCC demonstrated a decreasing trend, reaching a low of 142.08 days by March 31, 2022. This decline reflects improvements in inventory management, receivables collection, or both, leading to a more efficient cash cycle. The figure further decreased to approximately 130.95 days by June 30, 2022, and stayed relatively stable around 139 days by September 2022.

However, starting in late 2022, the CCC began to rise again, reaching 154.33 days at year-end and remaining elevated during the first quarter of 2023 at 154.51 days. The cycle then declined to 135.69 days by June 2023 but increased again to 153.14 days by September 2023, indicating cyclical or operational shifts affecting liquidity management.

The subsequent period shows a rising trend, with the cycle climbing to 163.77 days by December 2024 and further increasing to 170.59 days by March 2025. This upward movement suggests a deterioration in cash conversion efficiency, possibly due to extended receivables, inventory buildup, or delayed payables.

Overall, the company's cash conversion cycle has exhibited periods of improvement and deterioration, with a general tendency towards elongation in recent years. The fluctuations reflect changing operational efficiencies, market conditions, or strategic decisions affecting the duration of cash flows between procurement, production, and receivables collection. Maintaining or reducing the CCC is critical for enhancing liquidity and operational flexibility, and the recent upward trend warrants closer scrutiny to identify underlying causes and implement corrective measures.