Kennametal Inc (KMT)
Cash conversion cycle
| 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 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 132.30 | 140.53 | 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 | 140.65 | 128.45 | 124.52 | 131.43 |
| Days of sales outstanding (DSO) | days | 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 | 46.07 | 52.61 | 50.93 | 51.84 |
| Number of days of payables | days | 49.24 | 49.47 | 49.33 | 50.50 | 51.84 | 50.77 | 54.01 | 54.61 | 60.96 | 53.67 | 50.96 | 49.10 | 50.31 | 48.96 | 40.21 | 39.05 | 44.32 | 41.03 | 41.27 | 46.87 |
| Cash conversion cycle | days | 137.06 | 145.00 | 147.69 | 146.19 | 144.29 | 158.13 | 156.48 | 152.49 | 145.31 | 155.84 | 145.67 | 143.97 | 144.63 | 157.70 | 167.79 | 158.56 | 142.40 | 140.03 | 134.19 | 136.40 |
June 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 132.30 + 54.00 – 49.24
= 137.06
Kennametal Inc's cash conversion cycle has shown some fluctuation over the past few quarters. The cash conversion cycle represents the time it takes for a company to convert its investment in inventory and other inputs into cash inflows from sales.
Looking at the data provided, we see that there has been variability in Kennametal's cash conversion cycle. In the most recent quarter, ending on June 30, 2024, the cash conversion cycle was 137.06 days, which was lower compared to the previous quarter but still higher than some earlier periods. This suggests that the company was able to manage its working capital more efficiently in the latest quarter.
Over the past few years, there are instances of the cash conversion cycle increasing, such as in the first quarter of 2023 when it peaked at 167.79 days. However, there have also been periods where the cycle decreased, as seen in the fourth quarter of 2019 when it was at 134.19 days.
Overall, while Kennametal's cash conversion cycle has displayed fluctuations, it is important for the company to continue monitoring and managing this metric effectively to ensure optimal liquidity and operational efficiency.