Emerson Electric Company (EMR)

Cash conversion cycle

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Days of inventory on hand (DOH)	days	57.07	38.66	48.36	48.82	44.36
Days of sales outstanding (DSO)	days	74.30	63.91	59.36	60.93	59.30
Number of days of payables	days	36.28	28.32	49.73	43.43	44.22
Cash conversion cycle	days	95.10	74.26	58.00	66.32	59.45

September 30, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 57.07 + 74.30 – 36.28
= 95.10

The cash conversion cycle of Emerson Electric Co. has exhibited fluctuations over the past five years. In 2023, it increased to 95.09 days from 61.13 days in 2022, indicating a lengthening of the time it takes to convert its resources into cash. This trend is in contrast to the previous year, 2021, where the cycle decreased to 57.48 days from 68.88 days in 2020. In 2019, the cycle was 59.51 days.

The increase in the cash conversion cycle in 2023 may suggest potential inefficiencies in managing the company's working capital and could indicate challenges in converting inventory and receivables into cash. Investors and analysts may closely monitor future financial reports to assess whether this trend persists and its impact on the company's overall financial performance and liquidity.