TE Connectivity Ltd (TEL)

Cash conversion cycle

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 Dec 31, 2019
Days of inventory on hand (DOH) days 73.90 78.27 79.60 78.85 71.13 76.45 76.62 81.39 75.42 88.85 89.69 86.28 76.70 74.46 70.62 65.41 63.73 73.22 63.27 67.63
Days of sales outstanding (DSO) days 70.54 66.93 66.58 64.73 67.88 67.22 67.92 65.45 64.49 72.92 72.57 68.45 71.89 76.06 81.84 77.17 71.49 64.34 69.01 64.51
Number of days of payables days 50.74 48.74 46.35 47.88 43.56 44.11 45.74 48.69 44.90 56.25 59.40 59.56 58.37 60.33 59.33 51.58 41.70 41.79 43.95 48.38
Cash conversion cycle days 93.71 96.46 99.83 95.70 95.44 99.56 98.80 98.15 95.02 105.52 102.87 95.17 90.21 90.20 93.12 91.00 93.52 95.77 88.33 83.75

September 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 73.90 + 70.54 – 50.74
= 93.71

TE Connectivity Ltd's cash conversion cycle, a key measure of efficiency in managing working capital, has exhibited some fluctuations over the past several quarters. The cash conversion cycle indicates the time it takes for a company to convert its investments in inventory and accounts receivable into cash flows from sales.

From the data provided, we observe that the cash conversion cycle has ranged from a low of 83.75 days in March 2020 to a high of 105.52 days in June 2022. A downward trend in the cash conversion cycle is generally considered positive as it implies that the company is able to generate cash more quickly from its operations.

In the most recent quarter, the cash conversion cycle stood at 93.71 days, showing a slight improvement from the previous quarter. However, it is essential for TE Connectivity Ltd to continue monitoring and managing its cash conversion cycle effectively to ensure efficient utilization of its working capital and maximize cash flow generation.

Overall, fluctuations in the cash conversion cycle can be influenced by factors such as inventory management, accounts receivable collection efficiency, and payment terms with suppliers. Continuous analysis and improvement in these areas can help TE Connectivity Ltd optimize its cash conversion cycle and enhance its liquidity position in the long term.


Peer comparison

Sep 30, 2024

Company name
Symbol
Cash conversion cycle
TE Connectivity Ltd
TEL
93.71
Arrow Electronics Inc
ARW
73.38
Avnet Inc
AVT
104.39