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Illinois Tool Works Cash Conversion Cycle

: 102.00 (As of Mar. 2020)
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Cash Conversion Cycle is one of several measures of management effectiveness. It equals Days Sales Outstanding + Days Inventory - Days Payable.

Illinois Tool Works's Days Sales Outstanding for the three months ended in Mar. 2020 was 68.52.
Illinois Tool Works's Days Inventory for the three months ended in Mar. 2020 was 57.28.
Illinois Tool Works's Days Payable for the three months ended in Mar. 2020 was 23.8.
Therefore, Illinois Tool Works's Cash Conversion Cycle (CCC) for the three months ended in Mar. 2020 was 102.00.

Illinois Tool Works Cash Conversion Cycle Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Illinois Tool Works Annual Data
Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19
Cash Conversion Cycle Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 91.63 89.56 91.53 96.40 97.96

Illinois Tool Works Quarterly Data
Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20
Cash Conversion Cycle Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 103.61 100.77 99.18 96.99 102.00
Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.

Illinois Tool Works Cash Conversion Cycle Distribution

* The bar in red indicates where Illinois Tool Works's Cash Conversion Cycle falls into.


Illinois Tool Works Cash Conversion Cycle Calculation

Cash Conversion Cycle (CCC) measures how fast a company can convert cash on hand into even more cash on hand. This metric looks at the amount of time needed to sell inventory, the amount of time needed to collect receivables and the length of time the company is afforded to pay its bills without incurring penalties.

Cash Conversion Cycle is one of several measures of management effectiveness.

Illinois Tool Works's Cash Conversion Cycle for the fiscal year that ended in Dec. 2019 is calculated as

Cash Conversion Cycle=Days Sales Outstanding +Days Inventory-Days Payable
=63.67+55.33-21.04
=97.96

Illinois Tool Works's Cash Conversion Cycle for the quarter that ended in Mar. 2020 is calculated as:

Cash Conversion Cycle=Days Sales Outstanding+Days Inventory-Days Payable
=68.52+57.28-23.8
=102.00

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Illinois Tool Works  (NYSE:ITW) Cash Conversion Cycle Explanation

Generally, the lower this number is, the better for the company. Although it should be combined with other metrics (such as ROE % and ROA %), it can be especially useful for comparing close competitors, because the company with the lowest CCC is often the one with better management.

Be Aware

CCC is most effective with retail-type companies, which have inventories that are sold to customers. Consulting businesses, software companies and insurance companies are all examples of companies for whom this metric is meaningless.

The CCC is one of several tools that can help you evaluate management, especially if it is calculated for several consecutive time periods and for several competitors. Decreasing or steady CCCs are good, while rising ones should motivate you to dig a bit deeper.

Illinois Tool Works Cash Conversion Cycle Related Terms

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