Stanley Black & Decker Inc (SWK)
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 | 112.00 | 125.54 | 141.66 | 163.72 | 168.94 | 188.58 | 206.17 | 208.00 | 194.15 | 151.93 | 139.54 | 125.74 | 111.32 | 121.90 | 114.92 | 99.53 | 85.41 | 104.77 | 109.34 | 106.61 |
| Days of sales outstanding (DSO) | days | 35.99 | 39.23 | 40.84 | — | 28.57 | — | — | — | 37.88 | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | 54.34 | 56.81 | 64.73 | 68.81 | 67.57 | 74.06 | 97.52 | 111.76 | 122.64 | 112.29 | 113.72 | 106.33 | 97.87 | 99.45 | 88.38 | 79.76 | 79.08 | 79.06 | 88.74 | 86.47 |
| Cash conversion cycle | days | 93.65 | 107.96 | 117.77 | 94.91 | 129.93 | 114.52 | 108.64 | 96.24 | 109.39 | 39.64 | 25.82 | 19.41 | 13.45 | 22.45 | 26.55 | 19.78 | 6.33 | 25.71 | 20.60 | 20.14 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 112.00 + 35.99 – 54.34
= 93.65
The cash conversion cycle of Stanley Black & Decker Inc has shown fluctuations over the past few quarters. The cycle represents the time taken for the company to convert its investments in inventory into cash flows from sales.
In the most recent quarter, ending December 31, 2023, the cash conversion cycle stood at 93.65 days, indicating that it takes approximately 93.65 days for the company to convert its resources invested in inventory back into cash through sales.
Compared to the previous quarters, we observe that the cash conversion cycle has experienced some volatility. The cycle was at its highest at 129.93 days in the quarter ending December 31, 2022, and the lowest at 6.33 days in the quarter ending March 31, 2020.
The upward trend in the cash conversion cycle, especially in recent quarters, suggests potential inefficiencies in the company's inventory management, sales processes, or collection of receivables. It is essential for Stanley Black & Decker Inc to closely monitor and address the factors contributing to this increase in the cash conversion cycle to optimize working capital and cash flow management effectively.
Peer comparison
Dec 31, 2023