Parker-Hannifin Corporation (PH)

Cash conversion cycle

		Jun 30, 2025	Mar 31, 2025	Dec 31, 2024	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	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020
Days of inventory on hand (DOH)	days	82.81	82.15	80.72	82.08	79.65	85.14	88.37	85.57	84.07	90.41	94.35	99.31	72.08	77.19	77.95	78.43	73.13	69.63	68.33	64.46
Days of sales outstanding (DSO)	days	59.36	57.80	50.43	55.34	58.55	59.31	56.22	58.36	62.42	67.30	65.12	69.70	66.39	63.26	56.25	52.39	64.72	66.37	58.42	58.15
Number of days of payables	days	62.01	57.66	51.62	55.82	56.92	56.38	56.34	57.54	59.29	61.31	59.94	64.03	56.37	57.39	53.96	56.67	58.34	56.91	49.05	45.41
Cash conversion cycle	days	80.15	82.30	79.54	81.59	81.28	88.08	88.25	86.38	87.19	96.40	99.52	104.98	82.10	83.07	80.25	74.15	79.51	79.08	77.70	77.21

June 30, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 82.81 + 59.36 – 62.01
= 80.15

The analysis of Parker-Hannifin Corporation's cash conversion cycle (CCC) over the period from September 2020 to June 2025 indicates notable fluctuations and trends consistent with operational and strategic dynamics.

Initially, the CCC remained relatively stable between September 2020 and June 2021, averaging approximately 77 to 79.5 days. During this period, the company's liquidity management appeared steady, with minimal fluctuations. In particular, the cycle was at its lowest in September 2021 at 74.15 days, suggesting more efficient conversion processes or improved receivables and inventories management.

From September 2021 onward, there is a discernible upward trend in the CCC. By March 2022, the cycle extended to 83.07 days, and it continued to grow, peaking notably at 104.98 days in September 2022. This increase indicates that the company was taking longer to convert its investments in inventory and receivables into cash, potentially reflecting factors such as extended credit terms, increased inventory levels, or delays in receivables collection.

After reaching the peak in late 2022, the CCC showed signs of gradual reduction. By December 2022, it had decreased to approximately 99.52 days, and further decline ensued in 2023, with the cycle reaching roughly 86.38 days in September 2023. This reduction suggests ongoing efforts to enhance cash flow efficiency, possibly through tightening credit policies, inventory management improvements, or better receivable collections.

In the most recent period, from September 2023 to June 2025, the CCC exhibited minor fluctuations within an approximate range of 80 to 88 days. Notably, the values around June 2024 (81.28 days) and June 2025 (80.15 days) demonstrate a stabilization of the cycle at a somewhat lower level relative to the peak period of 2022, indicating improved and more consistent working capital management.

Overall, the cash conversion cycle trajectory reflects an initial period of stability, followed by a significant elongation corresponding to operational or market factors around 2022, and subsequent efforts toward cycle optimization leading to stabilization at a lower, more manageable level by mid-2024 and early 2025. These movements underscore the company's adaptive strategies in managing liquidity and working capital efficiency throughout the period observed.