Oshkosh Corporation (OSK)

Cash conversion cycle

		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	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
Days of inventory on hand (DOH)	days	88.02	86.05	89.64	87.98	85.63	83.36	85.47	86.00	77.80	73.41	73.10	71.58	88.49	108.08	118.38	116.06	93.20	81.94	71.09	63.02
Days of sales outstanding (DSO)	days	54.79	57.50	56.68	50.05	60.51	55.98	55.90	51.42	48.34	53.89	44.70	48.27	52.73	47.11	38.13	45.94	42.01	39.68	40.33	47.20
Number of days of payables	days	39.98	40.62	43.00	50.13	46.29	46.83	48.94	52.04	47.54	46.89	47.00	43.63	52.40	51.23	41.92	44.54	31.72	35.93	30.44	40.13
Cash conversion cycle	days	102.82	102.93	103.33	87.91	99.85	92.50	92.44	85.37	78.61	80.41	70.80	76.22	88.82	103.96	114.58	117.45	103.49	85.69	80.97	70.09

September 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 88.02 + 54.79 – 39.98
= 102.82

The cash conversion cycle of Oshkosh Corporation has exhibited some fluctuations over the past few quarters. It measures the time it takes for the company to convert its investments in inventory into cash inflows from sales.

The trend in the cash conversion cycle shows that the company's cycle has ranged from around 70 to 117 days over the period analyzed. A longer cash conversion cycle indicates that the company is taking more time to convert its investments into cash, potentially tying up capital for a longer period.

Oshkosh Corporation experienced a peak in its cash conversion cycle in Q4 2020 at 117.45 days, which then decreased in the following quarters. However, the cycle has shown some volatility with fluctuations observed in subsequent periods.

It is important for the company to effectively manage its inventory, receivables, and payables to optimize the cash conversion cycle. Analyzing the components of the cycle, such as days inventory outstanding, days sales outstanding, and days payables outstanding, can provide further insights into the efficiency of the company's working capital management.

Overall, Oshkosh Corporation's cash conversion cycle analysis suggests that the company should continue to focus on improving its operational efficiency to shorten the cycle and enhance its cash flow management.