Kaiser Aluminum Corporation (KALU)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 68.35 | 63.22 | 58.34 | 60.53 | 55.84 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 68.35 | 63.22 | 58.34 | 60.53 | 55.84 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 68.35 + — – —
= 68.35
The cash conversion cycle for Kaiser Aluminum Corporation has shown a gradual increase over the years, starting at 55.84 days as of December 31, 2020, and reaching 68.35 days by December 31, 2024. This indicates that the company is taking longer to convert its investments in inventory into cash receipts from customers.
The trend suggests potential inefficiencies in Kaiser Aluminum's working capital management, as a longer cash conversion cycle may indicate issues with inventory management, accounts receivable collection, or accounts payable turnover. It is essential for the company to closely monitor and potentially improve these processes to enhance its liquidity and overall financial performance.
Furthermore, a longer cash conversion cycle can put pressure on the company's cash flow and working capital, affecting its ability to meet short-term obligations or invest in growth opportunities. Management should consider implementing strategies to streamline operations and optimize the cash conversion cycle to enhance efficiency and profitability in the long run.
Peer comparison
Dec 31, 2024