Quaker Chemical Corporation (KWR)

Cash conversion cycle

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 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Days of inventory on hand (DOH) days 48.43 47.55 52.06 55.37 54.31 64.50 65.00 64.48 58.97 58.95 59.25 54.92 49.46 43.89 44.47 49.30 57.78 68.24 44.15 42.76
Days of sales outstanding (DSO) days 86.27 86.10 87.30 92.85 91.76 90.36 92.96 94.06 90.32 94.28 95.87 104.16 98.31 88.44 80.55 101.51 121.91 143.06 90.69 88.04
Number of days of payables days 38.27 36.04 36.70 40.87 36.99 42.57 51.08 54.61 50.53 50.79 53.59 56.57 50.53 42.42 33.34 49.33 54.20 67.98 43.87 41.93
Cash conversion cycle days 96.42 97.61 102.66 107.35 109.09 112.28 106.87 103.93 98.76 102.44 101.53 102.51 97.24 89.91 91.68 101.48 125.50 143.32 90.97 88.87

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 48.43 + 86.27 – 38.27
= 96.42

The cash conversion cycle for Quaker Houghton has shown fluctuations over the past eight quarters, ranging from a low of 97.49 days in Q4 2023 to a high of 118.49 days in Q3 2022. The trend indicates that the company's efficiency in managing its cash flows has been somewhat improving in more recent quarters compared to the previous periods.

A lower cash conversion cycle signifies that the company is able to collect cash from its sales, convert inventory into sales, and pay its suppliers more quickly. This could potentially indicate a more efficient operational process and better management of working capital.

Conversely, a longer cash conversion cycle may suggest inefficiencies in collecting receivables, managing inventory, or paying suppliers, leading to a higher amount of cash tied up in the operational cycle. This can have implications for liquidity management and overall financial health.

It would be beneficial for Quaker Houghton to continue monitoring and improving its cash conversion cycle to ensure optimal utilization of cash resources and efficient management of working capital.


Peer comparison

Dec 31, 2023

Company name
Symbol
Cash conversion cycle
Quaker Chemical Corporation
KWR
96.42
Valvoline Inc
VVV
6.69