Oshkosh Corporation (OSK)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Days of inventory on hand (DOH)	days	87.98	86.07	71.60	86.09	60.11
Days of sales outstanding (DSO)	days	50.00	51.53	48.25	46.01	47.40
Number of days of payables	days	50.13	52.08	43.65	33.04	38.28
Cash conversion cycle	days	87.86	85.51	76.21	99.05	69.24

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 87.98 + 50.00 – 50.13
= 87.86

The cash conversion cycle of Oshkosh Corp has shown variability over the past five years. In 2023, the cash conversion cycle increased to 122.47 days from 115.20 days in 2022, indicating a longer period to convert inventory into cash. This increase could suggest potential inefficiencies in managing inventory, collecting receivables, or paying suppliers.

Comparing to the previous years, the cash conversion cycle was relatively longer in 2020 at 130.42 days, which might have been a result of economic challenges or operational issues impacting Oshkosh's cash conversion efficiency. Conversely, the cycle was shorter at 95.18 days in 2019, demonstrating more effective working capital management during that period.

Overall, Oshkosh Corp should continue monitoring the cash conversion cycle to identify opportunities for improving inventory turnover, receivables collection, and payables management to enhance cash flow efficiency and overall financial performance.