Knowles Cor (KN)
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 | 135.14 | 109.28 | 126.67 | 109.87 | 96.30 |
| Days of sales outstanding (DSO) | days | 69.24 | 108.11 | 64.29 | 61.64 | 62.75 |
| Number of days of payables | days | 67.00 | 30.89 | 30.94 | 65.23 | 52.04 |
| Cash conversion cycle | days | 137.39 | 186.50 | 160.03 | 106.28 | 107.02 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 135.14 + 69.24 – 67.00
= 137.39
Knowles Cor's cash conversion cycle has fluctuated over the past five years. In December 2020, the cash conversion cycle stood at 107.02 days, indicating that the company took approximately 107 days to convert its investments in inventory and other resources into cash from sales. By the end of 2021, the cycle decreased slightly to 106.28 days, implying a marginal improvement in efficiency.
However, there was a significant increase in the cash conversion cycle in December 2022, reaching 160.03 days. This suggests that the company took longer to convert its resources into cash during this period. The trend continued into 2023, with the cycle further increasing to 186.50 days, indicating potential challenges in managing working capital efficiently.
In December 2024, the cash conversion cycle reduced to 137.39 days, although it still remained higher compared to previous years. Overall, fluctuations in the cash conversion cycle may indicate changes in inventory management, accounts receivable, and accounts payable practices within Knowles Cor. It would be essential for the company to analyze the underlying reasons for these fluctuations and take strategic measures to optimize its cash conversion cycle for improved financial performance.
Peer comparison
Dec 31, 2024