Franklin Electric Co Inc (FELE)
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 | 102.03 | 108.37 | 113.86 | 120.19 | 110.28 | 115.92 | 122.73 | 120.33 | 110.44 | 104.10 | 99.43 | 96.59 | 97.52 | 93.35 | 96.37 | 96.61 | 91.35 | 101.87 | 107.92 | 103.81 |
| Days of sales outstanding (DSO) | days | 39.77 | 44.79 | 52.85 | 49.11 | 41.53 | 46.53 | 54.01 | 47.32 | 43.28 | 51.63 | 57.50 | 50.12 | 46.99 | 50.47 | 53.87 | 47.51 | 48.29 | 55.33 | 62.19 | 51.34 |
| Number of days of payables | days | 30.57 | 34.06 | 31.95 | 37.62 | 28.18 | 31.92 | 42.33 | 43.42 | 40.44 | 43.15 | 42.27 | 34.23 | 31.08 | 31.51 | 27.93 | 27.54 | 25.13 | 28.85 | 30.52 | 28.19 |
| Cash conversion cycle | days | 111.23 | 119.09 | 134.76 | 131.69 | 123.63 | 130.53 | 134.41 | 124.23 | 113.28 | 112.58 | 114.65 | 112.48 | 113.44 | 112.31 | 122.31 | 116.57 | 114.51 | 128.35 | 139.59 | 126.97 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 102.03 + 39.77 – 30.57
= 111.23
The cash conversion cycle of Franklin Electric Co., Inc. has shown fluctuation over the past eight quarters. The company's cash conversion cycle is a measure of how long it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
In Q4 2023, the cash conversion cycle improved to 134.36 days compared to the previous quarter, indicating that the company was able to efficiently manage its inventory, receivables, and payables. This improvement suggests that the company may have streamlined its operations or enhanced its collection efforts.
However, in Q3 2023 and Q2 2023, the cash conversion cycle increased to 142.93 days and 160.94 days, respectively, indicating that the company took longer to convert its resources into cash during those quarters. This upward trend could be a result of slowing sales, inefficient inventory management, or delayed collections.
In Q1 2023, the cash conversion cycle decreased to 158.67 days from the previous quarter, reflecting a potential improvement in the company's working capital management.
Comparing the data to the same quarters in the previous year, Q4 2022, Q3 2022, and Q2 2022 also show fluctuations in the cash conversion cycle. However, the company managed to lower the cash conversion cycle in Q1 2022 to 151.96 days compared to the previous quarter, which could indicate more effective management of working capital.
Overall, Franklin Electric Co., Inc. should continue to monitor and analyze its cash conversion cycle to identify areas for improvement in managing its working capital effectively and enhancing its overall financial performance.
Peer comparison
Dec 31, 2023