Rockwell Automation Inc (ROK)
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 | 69.60 | 67.60 | 74.22 | 70.88 | 70.59 | 59.31 | 57.11 | 54.52 | 52.06 | 50.09 | 48.24 | 47.39 | 45.40 | 40.68 | 45.95 | 42.15 | 41.91 | 39.30 | 48.68 | 53.05 |
| Days of sales outstanding (DSO) | days | 77.31 | 85.96 | 93.40 | 88.76 | 85.12 | 83.10 | 84.60 | 79.27 | 75.24 | 75.02 | 78.07 | 85.41 | 82.02 | 72.92 | 68.42 | 71.07 | 71.14 | 64.97 | 67.39 | 67.97 |
| Number of days of payables | days | 44.15 | 55.34 | 52.19 | 52.95 | 57.47 | 57.84 | 57.11 | 54.57 | 51.01 | 55.84 | 58.47 | 56.09 | 51.10 | 47.91 | 45.42 | 49.76 | 47.47 | 47.42 | 46.72 | 52.69 |
| Cash conversion cycle | days | 102.77 | 98.22 | 115.44 | 106.69 | 98.23 | 84.58 | 84.59 | 79.22 | 76.30 | 69.26 | 67.83 | 76.70 | 76.31 | 65.69 | 68.95 | 63.46 | 65.58 | 56.85 | 69.35 | 68.33 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 69.60 + 77.31 – 44.15
= 102.77
The cash conversion cycle (CCC) of Rockwell Automation Inc has shown some fluctuations over the past eight quarters. The CCC represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
From the provided data, it is observed that the CCC has increased from 78.32 days in March 2022 to 125.70 days in June 2023, indicating a notable deterioration in the efficiency of the company's working capital management. This can be concerning as it suggests a potential slowdown in the conversion of inventory and receivables into cash.
Although there was a significant increase in the CCC in June 2023, it decreased to 104.74 days in September 2023, possibly indicating some improvement in the management of the company's working capital. However, the CCC increased again to 113.59 days by December 2023, suggesting that the company may be facing challenges in managing its working capital efficiently.
It is essential for Rockwell Automation Inc to closely monitor its cash conversion cycle and focus on optimizing its inventory and accounts receivable management processes to ensure a more efficient conversion of investments into cash flows. A longer cash conversion cycle can tie up essential resources and affect the company's liquidity and overall financial performance.
Peer comparison
Dec 31, 2023