Knife River Corporation (KNF)

Cash conversion cycle

		Dec 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.