Kennametal Inc (KMT)
Cash conversion cycle
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 143.53 | 132.30 | 142.16 | 152.70 | 134.89 |
| Days of sales outstanding (DSO) | days | 54.82 | 54.00 | 53.97 | 53.57 | 60.05 |
| Number of days of payables | days | 52.25 | 49.24 | 51.84 | 60.96 | 50.31 |
| Cash conversion cycle | days | 146.10 | 137.06 | 144.30 | 145.31 | 144.63 |
June 30, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 143.53 + 54.82 – 52.25
= 146.10
The cash conversion cycle (CCC) for Kennametal Inc over the observed period demonstrates relative stability with minor fluctuations. As of June 30, 2021, the CCC was approximately 144.63 days. This slightly increased to 145.31 days by June 30, 2022, indicating a marginal elongation in the period it takes for the company to convert its investments in inventory and other resources into cash flows from sales. The cycle then experienced a slight decrease to 144.30 days by June 30, 2023, suggesting a modest improvement in operational efficiency, although the change was minimal.
In the subsequent year, the CCC markedly decreased to 137.06 days as of June 30, 2024. This decline signifies a notable reduction in the time required for inventory conversion, receivables collection, and payments, pointing toward enhanced operational efficiency or improved working capital management during this period. However, this improvement was not sustained, as the cycle reversed and increased back to 146.10 days by June 30, 2025, surpassing the initial cycle length observed in 2021.
Overall, the trend in Kennametal Inc’s cash conversion cycle indicates a significant fluctuation, with a temporary improvement in 2024 followed by a return to longer cycle durations in 2025. The cycle consistently hovers around the mid-140-day range, suggesting ongoing challenges or strategic shifts that influence inventory management, receivables collection, or payables policy over the analyzed years.