Regal Beloit Corporation (RRX)
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 | 99.23 | 122.53 | 148.11 | 168.12 | 121.96 | 117.86 | 134.06 | 145.14 | 150.34 | 115.15 | 112.36 | 115.13 | 112.26 | 96.51 | 100.52 | 94.85 | 99.85 | 102.53 | 103.74 | 106.10 |
| Days of sales outstanding (DSO) | days | 31.37 | 33.00 | 44.71 | 60.61 | 56.75 | 58.05 | 66.11 | 71.13 | 75.58 | — | — | — | 43.69 | 48.35 | 35.86 | 31.00 | 29.33 | 30.49 | 32.29 | 31.33 |
| Number of days of payables | days | 42.78 | 55.30 | 63.76 | 64.70 | 45.40 | 47.46 | 63.03 | 69.62 | 81.17 | 73.05 | 68.29 | 65.72 | 58.56 | 51.85 | 50.67 | 49.26 | 49.60 | 51.19 | 56.48 | 56.71 |
| Cash conversion cycle | days | 87.82 | 100.23 | 129.06 | 164.04 | 133.30 | 128.46 | 137.14 | 146.65 | 144.75 | 42.10 | 44.07 | 49.40 | 97.39 | 93.01 | 85.71 | 76.59 | 79.57 | 81.84 | 79.54 | 80.73 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 99.23 + 31.37 – 42.78
= 87.82
The cash conversion cycle of Regal Rexnord Corp has shown fluctuations over the past eight quarters. In Q1 2022, the company had a relatively high cash conversion cycle of 154.45 days, indicating a longer time taken to convert its investments in inventory and other resources into cash inflows. Subsequently, the company managed to reduce its cash conversion cycle to 140.02 days in Q3 2022, showing improved efficiency in managing its working capital.
However, in the following quarters, the cash conversion cycle increased again, reaching a peak of 184.20 days in Q1 2023. This suggests that Regal Rexnord Corp faced challenges in efficiently managing its inventory, accounts receivable, and accounts payable during that period.
In the most recent quarter, Q4 2023, the cash conversion cycle improved to 117.05 days, indicating a more effective management of its working capital and a shorter time taken to convert resources into cash.
Overall, Regal Rexnord Corp should focus on optimizing its working capital management to maintain a shorter cash conversion cycle, which can improve liquidity and profitability in the long run.
Peer comparison
Dec 31, 2023