TE Connectivity Ltd (TEL)
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 | 71.13 | 75.42 | 76.70 | 63.73 | 61.04 |
| Days of sales outstanding (DSO) | days | 67.88 | 64.49 | 71.89 | 71.56 | 63.29 |
| Number of days of payables | days | 43.56 | 44.90 | 58.37 | 41.70 | 45.11 |
| Cash conversion cycle | days | 95.44 | 95.02 | 90.21 | 93.59 | 79.21 |
September 30, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 71.13 + 67.88 – 43.56
= 95.44
The cash conversion cycle of TE Connectivity Ltd has shown some fluctuation over the past five years. In the most recent period as of September 30, 2023, the company's cash conversion cycle stood at 95.44 days, which indicates that it takes approximately 95.44 days for TE Connectivity to convert its investments in inventory and other resources into cash flows from sales.
Comparing this figure to previous years, we observe a slightly increasing trend in the cash conversion cycle since 2021. In 2022, the company's cash conversion cycle was 95.02 days, slightly higher than in 2021 when it was 90.21 days. In 2020, the cash conversion cycle was 93.59 days, and in 2019, it was 79.21 days, showing a significant increase over the five-year period.
A rising cash conversion cycle can indicate inefficiencies in the company's operations, such as slower inventory turnover or longer accounts receivable collection periods. It is essential for TE Connectivity to monitor and manage its cash conversion cycle effectively to ensure optimal working capital management and liquidity.
Peer comparison
Sep 30, 2023