Stanley Black & Decker Inc (SWK)
Cash conversion cycle
| 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 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 152.83 | 155.19 | 149.32 | 148.58 | 145.98 | 145.94 | 152.34 | 163.72 | 168.94 | 199.87 | 213.17 | 209.25 | 190.74 | 135.78 | 125.33 | 113.46 | 104.44 | 113.21 | 109.38 | 97.14 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 152.83 | 155.19 | 149.32 | 148.58 | 145.98 | 145.94 | 152.34 | 163.72 | 168.94 | 199.87 | 213.17 | 209.25 | 190.74 | 135.78 | 125.33 | 113.46 | 104.44 | 113.21 | 109.38 | 97.14 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 152.83 + — – —
= 152.83
The cash conversion cycle of Stanley Black & Decker Inc has shown some fluctuations over the years. Initially, the company had a relatively stable cash conversion cycle, ranging around 100 days from March 2020 to March 2021. However, starting from June 2021, the cash conversion cycle began to increase significantly, reaching its peak at 213.17 days in June 2022.
This prolonged cash conversion cycle indicates that Stanley Black & Decker Inc took more time to convert its investments in inventory into cash receipts from sales. A longer cash conversion cycle may suggest inefficiencies in managing working capital and could potentially lead to liquidity issues.
From September 2022 onwards, there was a gradual decrease in the cash conversion cycle, reaching around 145-155 days from March 2023 to September 2024. This improvement suggests that the company may have implemented better inventory management practices, streamlined its receivables collection process, or negotiated better payment terms with suppliers.
Overall, it is important for Stanley Black & Decker Inc to continue monitoring and managing its cash conversion cycle effectively to ensure efficient working capital management and maintain healthy liquidity levels in the long term.
Peer comparison
Dec 31, 2024