Kellanova (K)

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	51.33	66.36	68.17	63.65	43.94	51.05	47.49	45.53	40.97	43.30	46.69	48.69	51.83	51.80	49.65	47.95	48.66	47.15	48.90	52.98
Days of sales outstanding (DSO)	days	43.62	52.22	53.74	—	45.42	—	—	—	38.32	—	—	—	—	—	—	—	—	—	—	—
Number of days of payables	days	95.55	113.40	112.28	102.50	84.26	87.14	81.11	78.99	75.40	79.37	85.21	91.41	99.74	100.45	96.59	93.93	94.73	91.86	95.14	95.20
Cash conversion cycle	days	-0.61	5.18	9.63	-38.84	5.09	-36.09	-33.62	-33.47	3.89	-36.07	-38.52	-42.71	-47.91	-48.64	-46.94	-45.98	-46.08	-44.71	-46.24	-42.22

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 51.33 + 43.62 – 95.55
= -0.61

The cash conversion cycle is a key metric that provides insight into how efficiently a company is managing its cash flow. It measures the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales.

Analyzing the trend of Kellanova's cash conversion cycle over the past few periods shows some fluctuations. The negative values in the cash conversion cycle indicate that the company is able to generate cash from its operations before having to pay its suppliers. This can be a positive sign as it indicates efficient management of working capital.

From December 2020 to June 2021, there was a gradual improvement in the cash conversion cycle, indicating better efficiency in converting investments into cash. However, from September 2021 to March 2022, the cash conversion cycle deteriorated significantly, reaching negative values again, suggesting potential inefficiencies in managing working capital during that period.

In the most recent period, the cash conversion cycle has improved, with a slightly negative value in December 2023. This improvement indicates that the company may have made efforts to streamline its operations and manage its working capital more effectively.

Overall, Kellanova's cash conversion cycle has shown fluctuations over the periods analyzed, with periods of both improvement and deterioration. It is crucial for the company to monitor and manage its cash conversion cycle effectively to maintain healthy cash flow and operational efficiency.