Eaton Corporation PLC (ETN)
Cash conversion cycle
| 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 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 100.34 | 100.39 | 96.59 | 95.52 | 93.12 | 92.97 | 92.78 | 92.66 | 90.29 | 92.38 | 94.27 | 90.50 | 81.52 | 77.22 | 75.15 | 71.25 | 62.04 | 59.83 | 58.91 | 60.87 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 100.34 | 100.39 | 96.59 | 95.52 | 93.12 | 92.97 | 92.78 | 92.66 | 90.29 | 92.38 | 94.27 | 90.50 | 81.52 | 77.22 | 75.15 | 71.25 | 62.04 | 59.83 | 58.91 | 60.87 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 100.34 + — – —
= 100.34
The cash conversion cycle for Eaton Corporation PLC has shown a gradual increase over the past few years, indicating potential challenges in managing its working capital efficiently. The cycle started at around 60.87 days as of March 31, 2020, and increased steadily to 100.34 days by December 31, 2024. This prolonged cycle suggests that the company may be taking longer to convert its investments in inventory and receivables into cash.
The increase in the cash conversion cycle could be attributed to various factors, such as extended inventory holding periods, slower collection of receivables, or delayed payment of payables. A longer cash conversion cycle can tie up valuable resources and potentially strain the company's liquidity position.
It is important for Eaton Corporation PLC to closely monitor and manage its cash conversion cycle to optimize its working capital and improve cash flow efficiency. By identifying and addressing bottlenecks in the cycle, the company can enhance its financial performance and strengthen its overall financial health.
Peer comparison
Dec 31, 2024
See also:
Eaton Corporation PLC Cash Conversion Cycle (Quarterly Data)