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