Quaker Chemical Corporation (KWR)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 48.43 | 54.31 | 58.97 | 49.46 | 57.78 |
| Days of sales outstanding (DSO) | days | 86.27 | 91.10 | 90.32 | 98.31 | 122.88 |
| Number of days of payables | days | 38.27 | 36.99 | 50.53 | 50.53 | 54.20 |
| Cash conversion cycle | days | 96.43 | 108.43 | 98.76 | 97.24 | 126.46 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 48.43 + 86.27 – 38.27
= 96.43
The cash conversion cycle of Quaker Houghton has shown fluctuations over the past five years.
In 2023, the cash conversion cycle decreased to 97.49 days compared to 113.73 days in 2022 and 101.11 days in 2021. This indicates an improvement in the company's efficiency in managing its cash flow and working capital from the previous year.
In 2020, the cash conversion cycle was 94.39 days, which was lower than 2021 but higher than 2023. This suggests that the company's cash management may have been slightly less efficient in 2020 compared to the recent years.
The cash conversion cycle was highest in 2019 at 126.41 days, indicating a longer time for the company to convert its investments in inventory and accounts receivables into cash. This could be a sign of inefficient working capital management or delays in collecting receivables.
Overall, Quaker Houghton's cash conversion cycle has shown variability over the years, with improvements in recent years suggesting a more efficient cash management strategy. However, the company may need to further evaluate its working capital processes to optimize its cash conversion cycle and enhance liquidity management.
Peer comparison
Dec 31, 2023