Eaton Corporation PLC (ETN)
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 | 92.45 | 92.98 | 92.79 | 92.67 | 90.30 | 92.38 | 94.27 | 90.50 | 81.52 | 77.22 | 75.15 | 71.25 | 62.04 | 59.83 | 58.91 | 60.87 | 71.41 | 73.27 | 71.63 | 72.87 |
| Days of sales outstanding (DSO) | days | 70.69 | 72.34 | 73.42 | 73.06 | 72.35 | 69.75 | 69.27 | 65.77 | 59.83 | 61.56 | 63.58 | 62.94 | 58.86 | 56.82 | 50.42 | 51.84 | 59.09 | 64.67 | 66.97 | 52.40 |
| Number of days of payables | days | 83.20 | 81.51 | 80.70 | 80.17 | 80.87 | 79.14 | 82.45 | 78.22 | 76.80 | 71.40 | 69.97 | 64.51 | 58.45 | 51.04 | 44.64 | 46.32 | 53.82 | 57.84 | 56.95 | 57.20 |
| Cash conversion cycle | days | 79.94 | 83.80 | 85.51 | 85.56 | 81.78 | 82.98 | 81.09 | 78.05 | 64.55 | 67.37 | 68.76 | 69.68 | 62.45 | 65.61 | 64.69 | 66.40 | 76.68 | 80.10 | 81.66 | 68.07 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 92.45 + 70.69 – 83.20
= 79.94
The cash conversion cycle of Eaton Corporation plc has shown fluctuations over the past eight quarters. It ranged from a low of 79.66 days in Q4 2023 to a high of 84.92 days in Q2 2023. Generally, the company's cash conversion cycle has remained relatively stable around the 80-85 days range.
The cash conversion cycle is a key metric that reflects how efficiently a company manages its working capital. A shorter cash conversion cycle indicates that the company is able to convert its investment in inventory and receivables into cash more quickly, which is generally seen as positive. On the other hand, a longer cash conversion cycle may suggest inefficiencies in managing working capital.
Eaton Corporation plc should continue monitoring its cash conversion cycle closely to ensure effective management of its working capital and strive for improvements in efficiency to enhance its overall financial performance.
Peer comparison
Dec 31, 2023
See also:
Eaton Corporation PLC Cash Conversion Cycle (Quarterly Data)