Knife River Corporation (KNF)
Cash conversion cycle
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | ||
|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 50.91 | |||
| Days of sales outstanding (DSO) | days | 34.40 | |||
| Number of days of payables | days | 17.15 | |||
| Cash conversion cycle | days | 68.17 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 50.91 + 34.40 – 17.15
= 68.17
Based on the provided data, Knife River Corporation's cash conversion cycle for the fiscal year ended December 31, 2023, is 68.17 days. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales. It is a crucial metric in determining the efficiency of a company's working capital management.
A lower cash conversion cycle indicates that Knife River Corporation is managing its working capital effectively, resulting in quicker conversion of inventory and receivables into cash. Conversely, a higher cash conversion cycle may suggest inefficiencies in managing inventory levels and collecting receivables.
In this case, with a cash conversion cycle of 68.17 days, Knife River Corporation appears to have a moderate efficiency in its working capital management. Monitoring and potentially improving the cash conversion cycle can help enhance the company's overall liquidity and financial health.
Peer comparison
Dec 31, 2023