World Kinect Corporation (WKC)
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 | 4.56 | 5.21 | 5.23 | 5.29 | 5.20 | 4.93 | 3.89 | 3.89 | 4.91 | 4.91 | 7.03 | 6.73 | 5.71 | 6.32 | 7.25 | 6.95 | 6.44 | 4.42 | 3.92 | 3.47 |
| Days of sales outstanding (DSO) | days | 21.06 | 20.55 | 20.49 | 21.17 | 20.66 | 21.35 | 17.03 | 18.50 | 20.36 | 21.02 | 30.20 | 33.93 | 27.43 | 28.43 | 30.13 | 33.29 | 22.20 | 18.15 | 17.31 | 20.04 |
| Number of days of payables | days | 24.19 | 23.13 | 24.06 | 23.98 | 24.24 | 24.80 | 19.07 | 20.21 | 22.23 | 21.85 | 30.64 | 34.07 | 28.67 | 29.14 | 31.36 | 33.74 | 22.73 | 16.49 | 13.82 | 16.06 |
| Cash conversion cycle | days | 1.42 | 2.63 | 1.66 | 2.48 | 1.62 | 1.48 | 1.86 | 2.18 | 3.05 | 4.07 | 6.60 | 6.58 | 4.47 | 5.61 | 6.02 | 6.50 | 5.92 | 6.09 | 7.40 | 7.45 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 4.56 + 21.06 – 24.19
= 1.42
The cash conversion cycle of World Kinect Corporation has shown a general trend of decreasing over the years, indicating improvements in the efficiency of the company's cash management.
From March 31, 2020, to December 31, 2024, the cash conversion cycle has decreased from 7.45 days to 1.42 days. This signifies that World Kinect Corporation has been able to convert its investments in inventory and accounts receivable into cash more quickly.
The decreasing trend suggests that the company is managing its inventory and receivables effectively, thereby shortening the time it takes to generate cash from its operating cycle. A lower cash conversion cycle implies that the company is able to maintain liquidity and financial health by efficiently managing its working capital.
Overall, the decreasing cash conversion cycle of World Kinect Corporation indicates a positive trend in its cash management efficiency and working capital optimization, which could potentially lead to improved profitability and financial performance in the long term.