ITT Inc (ITT)
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 | 96.53 | 97.10 | 97.93 | 98.96 | 94.35 | 95.80 | 100.28 | 91.18 | 84.31 | 79.73 | 81.15 | 79.93 | 77.60 | 81.42 | 79.01 | 72.94 | 74.06 | 79.10 | 81.53 | 77.35 |
| Days of sales outstanding (DSO) | days | 75.07 | 76.20 | 79.62 | 79.92 | 76.82 | 79.20 | 78.00 | 80.48 | 73.28 | 73.34 | 75.10 | 79.35 | 74.76 | 71.91 | 64.80 | 74.43 | 74.17 | 74.71 | 78.94 | 77.30 |
| Number of days of payables | days | 73.31 | 69.00 | 69.42 | 69.27 | 70.88 | 71.28 | 78.34 | 78.79 | 73.06 | 65.91 | 67.49 | 69.75 | 66.04 | 64.64 | 55.67 | 61.78 | 62.66 | 64.94 | 67.21 | 67.24 |
| Cash conversion cycle | days | 98.29 | 104.30 | 108.13 | 109.61 | 100.29 | 103.72 | 99.94 | 92.87 | 84.53 | 87.15 | 88.76 | 89.53 | 86.32 | 88.69 | 88.14 | 85.59 | 85.57 | 88.87 | 93.25 | 87.42 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 96.53 + 75.07 – 73.31
= 98.29
The cash conversion cycle of ITT Inc has shown some fluctuation over the past eight quarters. A shorter cash conversion cycle indicates that the company is able to efficiently convert its investments in inventory and receivables back into cash. In Q1 2022, the company had the shortest cash conversion cycle of 92.87 days, which suggests that it was managing its working capital effectively at that time.
However, the cash conversion cycle increased in subsequent quarters, peaking in Q2 2023 at 108.13 days. This prolonged cycle indicates that ITT Inc may have faced challenges in efficiently managing its inventory, accounts receivable, and accounts payable during that period.
Overall, the trend in ITT Inc's cash conversion cycle suggests that the company may need to focus on optimizing its working capital management to improve cash flow and operational efficiency. A proactive approach to managing inventory levels, collecting receivables promptly, and extending payables judiciously could help in reducing the cash conversion cycle and enhancing the company's liquidity position.
Peer comparison
Dec 31, 2023