Timken Company (TKR)
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 | 138.54 | 144.14 | 141.41 | 139.39 | 136.89 | 133.56 | 138.37 | 135.96 | 135.97 | 129.75 | 134.07 | 130.94 | 125.59 | 122.14 | 121.06 | 122.11 | 122.67 | 115.84 | 114.72 | 114.39 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 138.54 | 144.14 | 141.41 | 139.39 | 136.89 | 133.56 | 138.37 | 135.96 | 135.97 | 129.75 | 134.07 | 130.94 | 125.59 | 122.14 | 121.06 | 122.11 | 122.67 | 115.84 | 114.72 | 114.39 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 138.54 + — – —
= 138.54
The cash conversion cycle of Timken Company has exhibited fluctuations over the past few years based on the provided data. The cash conversion cycle, which represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, is an important metric for assessing a company's operational efficiency.
From March 2020 to December 2024, Timken's cash conversion cycle has shown an overall increasing trend, indicating potential challenges in managing its working capital effectively. The company experienced a relatively stable cycle in the range of 114 to 122 days from March 2020 to September 2021. However, from December 2021 onwards, there was a noticeable uptrend in the cycle, reaching a peak of 144 days by September 30, 2024.
A longer cash conversion cycle may suggest inefficiencies in inventory management, collection of receivables, or payment of payables, which can tie up cash within the business and impact liquidity. It is essential for Timken Company to closely monitor and address the factors contributing to the prolonged cycle to improve its cash flow management and operational performance.
Peer comparison
Dec 31, 2024