Rockwell Automation Inc (ROK)
Cash conversion cycle
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 67.08 | 58.80 | 49.82 | 40.49 | 39.21 |
| Days of sales outstanding (DSO) | days | 85.95 | 84.52 | 75.02 | 73.34 | 64.89 |
| Number of days of payables | days | 54.92 | 57.34 | 55.54 | 47.69 | 47.31 |
| Cash conversion cycle | days | 98.11 | 85.98 | 69.30 | 66.14 | 56.79 |
September 30, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 67.08 + 85.95 – 54.92
= 98.11
The cash conversion cycle for Rockwell Automation Inc has shown an increasing trend over the past five years, indicating a lengthening period between the company's cash outflows and inflows associated with its operating activities. Specifically, the cycle expanded from 52.83 days in 2019 to 104.74 days in 2023. This indicates that the company has taken longer to convert its investments in inventory and accounts receivable into cash, which may potentially raise concerns about its liquidity and working capital management. It is essential for the company to closely monitor and efficiently manage its cash conversion cycle to optimize its cash flow and operational efficiency.
Peer comparison
Sep 30, 2023