Kennametal Inc (KMT)
Cash conversion cycle
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 143.53 | 147.83 | 139.09 | 139.01 | 131.77 | 140.25 | 145.89 | 145.93 | 142.16 | 153.23 | 158.27 | 156.83 | 152.70 | 152.59 | 146.14 | 140.01 | 134.89 | 141.73 | 149.02 | 145.99 |
| Days of sales outstanding (DSO) | days | 54.82 | 53.26 | 45.85 | 50.63 | 54.00 | 53.93 | 51.13 | 50.75 | 53.97 | 55.67 | 52.22 | 50.27 | 53.57 | 56.92 | 50.48 | 53.05 | 60.05 | 64.93 | 58.97 | 51.62 |
| Number of days of payables | days | 52.25 | 51.29 | 51.45 | 51.65 | 49.04 | 49.37 | 49.33 | 50.50 | 51.84 | 50.77 | 54.01 | 54.61 | 60.96 | 53.67 | 50.96 | 49.10 | 50.31 | 48.96 | 38.32 | 39.05 |
| Cash conversion cycle | days | 146.10 | 149.80 | 133.49 | 137.99 | 136.72 | 144.81 | 147.69 | 146.19 | 144.29 | 158.13 | 156.48 | 152.49 | 145.31 | 155.84 | 145.67 | 143.97 | 144.63 | 157.70 | 169.67 | 158.56 |
June 30, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 143.53 + 54.82 – 52.25
= 146.10
The analysis of Kennametal Inc.'s cash conversion cycle (CCC) over the period from September 2020 to June 2025 reveals patterns of operational efficiency and liquidity management. The CCC, which measures the average number of days it takes for a company to convert its investments in inventory and other resources into cash flows from sales, exhibits fluctuations within a generally consistent range.
Initially, in September 2020, the CCC stood at approximately 158.56 days, reflecting the period needed to convert inventories and receivables into cash. This figure increased to a peak of around 169.67 days by December 2020, indicating a lengthening in the cycle, potentially due to slower inventory turnover or extended receivables collection periods amid the uncertainty of that period.
Subsequent quarters showed oscillations, with a trend of gradual reduction in the CCC observed from March 2021 through June 2021, reaching approximately 144.63 days. This decline suggests improved efficiency in managing receivables and inventories during this interval. However, this was followed by minor fluctuations, with the cycle remaining relatively stable around 145 days through late 2021 and into 2022.
From March 2022 onward, the CCC displayed slight upward and downward movements, reaching a high of approximately 158.13 days in March 2023, nearly reverting to the earlier elevated levels. Notably, there was a downward trend observed in 2024, culminating in a low of approximately 133.49 days by December 2024, indicating a significant improvement in operational efficiency—likely due to shorter inventory periods or faster receivables collection.
In early 2025, the CCC increased again to about 149.80 days in March 2025 but then decreased to around 146.10 days by June 2025, suggesting a stabilization at a somewhat elevated level compared to late 2024. Overall, the data indicates that Kennametal Inc. has experienced varying periods of operational efficiency, with recent trends pointing towards a reduction in the cash conversion cycle, which could be favorable for liquidity management and working capital optimization.
The fluctuations reflect dynamic operational conditions, potentially influenced by market demand, supply chain factors, and credit policies. The recent downward trend toward the latter part of the observed period suggests ongoing efforts to improve process efficiencies and reduce working capital requirements, although the cycle remains somewhat volatile and subject to external and internal operational influences.