Kratos Defense & Security Solutions (KTOS)
Cash conversion cycle
| 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 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 73.49 | 69.33 | 68.34 | 67.01 | 71.91 | 73.55 | 72.61 | 72.95 | 69.38 | 67.67 | 68.71 | 71.62 | 66.54 | 57.08 | 56.39 | 55.80 | 55.40 | 54.43 | 54.02 | 46.99 |
| Days of sales outstanding (DSO) | days | 113.90 | 104.01 | 103.35 | 109.72 | 109.85 | 115.86 | 126.85 | 127.52 | 138.28 | 133.40 | 128.17 | 138.09 | 125.94 | 128.05 | 124.35 | 119.75 | 124.94 | 132.93 | 138.99 | 126.84 |
| Number of days of payables | days | 34.53 | 35.07 | 26.23 | 25.45 | 27.86 | 29.71 | 27.77 | 29.20 | 28.42 | 30.90 | 30.55 | 35.26 | 32.12 | 31.37 | 27.05 | 36.85 | 33.55 | 37.14 | 37.73 | 31.53 |
| Cash conversion cycle | days | 152.86 | 138.27 | 145.45 | 151.28 | 153.91 | 159.70 | 171.69 | 171.27 | 179.23 | 170.17 | 166.32 | 174.45 | 160.36 | 153.76 | 153.69 | 138.70 | 146.79 | 150.22 | 155.27 | 142.29 |
March 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 73.49 + 113.90 – 34.53
= 152.86
The analysis of the cash conversion cycle (CCC) for Kratos Defense & Security Solutions from June 30, 2020, through March 31, 2025, reveals notable fluctuations and an overall trend toward improvement over time.
Initially, the CCC was 142.29 days as of June 30, 2020, and increased during the subsequent quarters, reaching a peak of approximately 179.23 days on March 31, 2023. This upward trend suggests that the company's operational cycle, encompassing inventory turnover, receivables collection, and payables deferral, was lengthening during this period, potentially indicating slower collections or extended inventory holding periods relative to cash outflows.
Following this peak, a gradual decrease is observed, with the CCC declining to around 138.27 days by December 31, 2024. This reduction reflects improvements in operational efficiency, possibly through faster collection cycles, shorter inventory holding periods, or more effective management of payables.
The data for the most recent period shows a slight uptick again to approximately 152.86 days as of March 31, 2025, suggesting some stabilization or minor contraction of the cycle.
Overall, the trend from the pandemic-era peak indicates efforts toward optimizing the cash conversion cycle, thereby enhancing liquidity and working capital management. The reductions in cycle length in recent periods demonstrate progress in operational efficiencies, although the cycle remains relatively elevated, indicative of the complex nature of defense industry operations with potentially longer lead times and significant project-based receivable timings.
In summary, Kratos Defense & Security Solutions has experienced fluctuations in its cash conversion cycle over the analyzed period, with a significant increase followed by gradual improvements, signaling ongoing efforts to streamline operations and improve cash flow management.
Peer comparison
Mar 31, 2025