Analysis of Short-term (Operating) Activity Ratios
Quarterly Data
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Short-term Activity Ratios (Summary)
Eaton Corp. plc, short-term (operating) activity ratios (quarterly data)
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
- Inventory Turnover
- The inventory turnover ratio shows a consistent downward trend over the observed periods, declining from 5.12 times at the start to 3.51 times by the most recent quarter. This indicates a gradual slowing in the rate at which inventory is sold and replaced, suggesting either increased inventory levels or slower sales.
- Receivables Turnover
- Receivables turnover experienced a slight decrease overall, starting at 5.79 times and trending downwards to 4.74 times. The pattern reflects a lengthening in the time it takes for the company to collect payment from customers, potentially impacting liquidity.
- Payables Turnover
- Payables turnover similarly declined from 5.66 to around 4.27 times. This suggests the company is taking longer to pay its suppliers, which may be indicative of cash management strategies or extended payment terms.
- Working Capital Turnover
- Working capital turnover exhibited significant volatility, with an initial spike to 21.65 and 65.65 times in early quarters, followed by a general decline to lower single-digit levels. The fluctuations imply instability in the efficiency of using working capital for revenue generation, with recent periods showing moderate improvement.
- Average Inventory Processing Period
- The inventory processing period increased steadily from 71 days to 104 days, corroborating the declining inventory turnover and suggesting slower movement of inventory through the supply chain.
- Average Receivable Collection Period
- This period extended from 63 to 77 days over the timeframe, reflecting slower collection from customers and potentially higher credit risk or relaxed credit policies.
- Operating Cycle
- The operating cycle lengthened from 134 to 181 days, largely driven by increases in inventory holding and receivables collection periods. This indicates that cash is tied up in the operating cycle for progressively longer periods.
- Average Payables Payment Period
- The payables period increased from 65 to approximately 85 days, demonstrating that the company has lengthened the time it takes to pay its suppliers, possibly as a measure to conserve cash.
- Cash Conversion Cycle
- The cash conversion cycle showed an initial stability around 69 days but then increased to a peak of 96 days, indicating a growing delay in converting resource inputs into cash flow. This longer cycle suggests potential liquidity pressure as funds remain tied up in operations for extended durations.
- Overall Analysis
- The collective trends illustrate that the company is experiencing slower inventory turnover, extended receivable collections, and longer operating and cash conversion cycles. Concurrently, payables are being settled over longer periods, likely as a response to cash flow management needs. The increasing durations in days for inventory processing and receivables collection contribute to a lengthened operating and cash conversion cycle, signaling greater working capital requirements and potential liquidity constraints. While the working capital turnover shows volatility, recent periods indicate some improvement in efficiency, yet overall working capital management appears to require attention to mitigate cash flow risks.
Turnover Ratios
Average No. Days
Inventory Turnover
Eaton Corp. plc, inventory turnover calculation (quarterly data)
| Jun 30, 2025 | Mar 31, 2025 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Cost of products sold | 4,431) | 3,930) | 3,811) | 3,899) | 3,940) | 3,725) | 3,732) | 3,684) | 3,747) | 3,599) | 3,546) | 3,545) | 3,505) | 3,269) | 3,226) | 3,338) | 3,545) | 3,184) | ||||||
| Inventory | 4,581) | 4,392) | 4,227) | 4,178) | 3,963) | 3,868) | 3,739) | 3,713) | 3,670) | 3,604) | 3,430) | 3,428) | 3,445) | 3,317) | 2,969) | 2,802) | 2,668) | 2,399) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Inventory turnover1 | 3.51 | 3.55 | 3.64 | 3.66 | 3.81 | 3.85 | 3.95 | 3.93 | 3.93 | 3.94 | 4.04 | 3.95 | 3.87 | 4.03 | 4.48 | 4.73 | 4.86 | 5.12 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Inventory Turnover, Competitors2 | ||||||||||||||||||||||||
| Boeing Co. | 0.86 | 0.80 | 0.78 | 0.85 | 0.78 | 0.82 | 0.88 | 0.87 | 0.88 | 0.83 | 0.81 | 0.78 | 0.74 | 0.74 | 0.75 | 0.77 | 0.76 | 0.74 | ||||||
| Caterpillar Inc. | 2.16 | 2.21 | 2.39 | 2.36 | 2.42 | 2.50 | 2.58 | 2.47 | 2.42 | 2.38 | 2.54 | 2.36 | 2.40 | 2.46 | 2.53 | 2.44 | 2.49 | 2.46 | ||||||
| GE Aerospace | 2.29 | 2.34 | 2.49 | 3.29 | 4.08 | 2.58 | 3.05 | 3.02 | 3.15 | 3.32 | 3.19 | 3.10 | 3.04 | 3.25 | 3.40 | 3.21 | 3.28 | 3.46 | ||||||
| Honeywell International Inc. | 3.53 | 3.67 | 3.70 | 3.73 | 3.69 | 3.65 | 3.72 | 3.76 | 3.82 | 3.90 | 4.04 | 4.09 | 4.06 | 4.20 | 4.55 | 4.72 | 4.88 | 4.85 | ||||||
| Lockheed Martin Corp. | 17.84 | 17.94 | 18.46 | 19.41 | 20.21 | 18.67 | 18.87 | 17.88 | 16.82 | 16.63 | 18.68 | 18.09 | 16.20 | 18.12 | 19.45 | 19.81 | 18.64 | 17.58 | ||||||
| RTX Corp. | 4.77 | 4.83 | 5.12 | 4.74 | 4.64 | 4.76 | 4.83 | 4.60 | 4.68 | 4.81 | 5.03 | 5.03 | 5.14 | 5.33 | 5.65 | 5.57 | 5.49 | 5.48 | ||||||
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
1 Q2 2025 Calculation
Inventory turnover
= (Cost of products soldQ2 2025
+ Cost of products soldQ1 2025
+ Cost of products soldQ4 2024
+ Cost of products soldQ3 2024)
÷ Inventory
= (4,431 + 3,930 + 3,811 + 3,899)
÷ 4,581 = 3.51
2 Click competitor name to see calculations.
- Cost of Products Sold
- The cost of products sold exhibited an overall upward trend from the first quarter of 2021 to the second quarter of 2025. Initially, the values fluctuated somewhat, rising from 3,184 million USD in March 2021 to 3,546 million USD by December 2021. Throughout 2022, the cost remained relatively stable around the mid-3,500 million USD mark but resumed a steady increase starting 2023, reaching a significant peak of 4,431 million USD by June 2025. This upward trajectory suggests increasing production costs or volume sold over time.
- Inventory Levels
- Inventory levels consistently increased over the observed period, starting at 2,399 million USD in March 2021 and reaching 4,581 million USD by March 2025. The progression was steady, with only minor fluctuations, reflecting accumulation of stock or possibly expansion in business operations. The consistent build-up in inventory might indicate preparation for higher demand or slower inventory turnover.
- Inventory Turnover Ratio
- The inventory turnover ratio declined progressively throughout the timeframe, starting from 5.12 in March 2021 and decreasing to 3.51 by June 2025. This downward trend implies that the company is turning over its inventory less frequently, suggesting slower movement of inventory relative to sales. The reduction in turnover ratio corresponds with rising inventory levels and increasing cost of products sold, potentially pointing to either increased inventory holding or challenges in sales velocity.
Receivables Turnover
Eaton Corp. plc, receivables turnover calculation (quarterly data)
| Jun 30, 2025 | Mar 31, 2025 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Net sales | 7,028) | 6,377) | 6,240) | 6,345) | 6,350) | 5,943) | 5,967) | 5,880) | 5,866) | 5,483) | 5,384) | 5,313) | 5,212) | 4,843) | 4,798) | 4,923) | 5,215) | 4,692) | ||||||
| Accounts receivable, net | 5,486) | 5,094) | 4,619) | 4,886) | 4,861) | 4,674) | 4,475) | 4,460) | 4,399) | 4,239) | 4,076) | 3,816) | 3,837) | 3,667) | 3,297) | 3,393) | 3,341) | 3,065) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Receivables turnover1 | 4.74 | 4.97 | 5.39 | 5.04 | 4.97 | 5.06 | 5.18 | 5.07 | 5.01 | 5.05 | 5.09 | 5.28 | 5.15 | 5.39 | 5.95 | 5.75 | 5.72 | 5.79 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Receivables Turnover, Competitors2 | ||||||||||||||||||||||||
| Boeing Co. | 23.61 | 21.67 | 25.28 | 25.33 | 23.31 | 25.83 | 29.37 | 24.99 | 24.99 | 24.65 | 26.46 | 22.98 | 20.27 | 25.37 | 23.58 | 27.95 | 24.76 | 23.97 | ||||||
| Caterpillar Inc. | 6.14 | 6.56 | 6.61 | 6.85 | 6.69 | 6.86 | 6.86 | 6.95 | 6.56 | 6.37 | 6.39 | 6.59 | 6.10 | 5.46 | 5.68 | 5.97 | 5.51 | 5.07 | ||||||
| GE Aerospace | 3.61 | 3.73 | 3.77 | 4.90 | 6.13 | 3.90 | 4.17 | 4.61 | 4.67 | 5.00 | 4.09 | 4.19 | 4.39 | 4.43 | 4.55 | 4.83 | 4.74 | 4.59 | ||||||
| Honeywell International Inc. | 4.53 | 4.75 | 4.92 | 4.80 | 4.81 | 4.94 | 4.87 | 4.65 | 4.52 | 4.57 | 4.77 | 4.74 | 4.45 | 4.82 | 5.04 | 4.78 | 4.89 | 4.89 | ||||||
| Lockheed Martin Corp. | 21.73 | 35.48 | 30.22 | 33.30 | 24.26 | 30.86 | 31.69 | 28.14 | 19.67 | 25.61 | 26.34 | 26.06 | 18.87 | 26.02 | 34.15 | 29.27 | 25.59 | 29.81 | ||||||
| RTX Corp. | 6.75 | 7.15 | 7.36 | 7.83 | 7.06 | 6.91 | 6.36 | 6.67 | 7.13 | 6.81 | 7.36 | 7.15 | 6.28 | 7.15 | 6.66 | 6.69 | 6.99 | 6.03 | ||||||
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
1 Q2 2025 Calculation
Receivables turnover
= (Net salesQ2 2025
+ Net salesQ1 2025
+ Net salesQ4 2024
+ Net salesQ3 2024)
÷ Accounts receivable, net
= (7,028 + 6,377 + 6,240 + 6,345)
÷ 5,486 = 4.74
2 Click competitor name to see calculations.
- Net Sales
- The net sales exhibit a general upward trend over the analyzed quarters. Starting from 4,692 million USD in the first quarter of 2021, sales increased steadily, reaching 7,028 million USD by the second quarter of 2025. There are minor fluctuations in certain quarters, for example, a slight dip was observed in the fourth quarter of 2024 compared to the previous quarter. However, the overall trajectory indicates growth in revenue, reflecting expanding sales or price improvements over time.
- Accounts Receivable, Net
- The accounts receivable also show a rising trend over the period, increasing from 3,065 million USD in the first quarter of 2021 to 5,486 million USD by the second quarter of 2025. The growth in receivables is relatively consistent, with small periodic accelerations. The increase in accounts receivable corresponds with the increase in net sales, which is typical as more sales often generate higher amounts owed by customers.
- Receivables Turnover
- The receivables turnover ratio demonstrates a declining trend over the timeline, moving from 5.79 in the first quarter of 2021 down to 4.74 by the second quarter of 2025. This indicates that the company is collecting its receivables at a slower rate compared to earlier periods. Despite some minor fluctuations within quarters, the overall downward trajectory suggests a lengthening in the collection period, potentially pointing to changes in credit terms, customer payment behavior, or collection effectiveness.
- Overall Analysis
- The concurrent increase in both net sales and accounts receivable, coupled with a decreasing receivables turnover ratio, implies that the company is experiencing higher sales volumes with a proportional or slightly slower collection of receivables. This situation may warrant attention to the management of credit policies and collection processes to maintain optimal liquidity levels. While revenue growth is positive, the elongation in the collection cycle could introduce cash flow challenges if not addressed appropriately.
Payables Turnover
Eaton Corp. plc, payables turnover calculation (quarterly data)
| Jun 30, 2025 | Mar 31, 2025 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Cost of products sold | 4,431) | 3,930) | 3,811) | 3,899) | 3,940) | 3,725) | 3,732) | 3,684) | 3,747) | 3,599) | 3,546) | 3,545) | 3,505) | 3,269) | 3,226) | 3,338) | 3,545) | 3,184) | ||||||
| Accounts payable | 3,762) | 3,654) | 3,678) | 3,609) | 3,497) | 3,400) | 3,365) | 3,255) | 3,192) | 3,118) | 3,072) | 2,937) | 3,013) | 2,867) | 2,797) | 2,591) | 2,484) | 2,172) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Payables turnover1 | 4.27 | 4.26 | 4.18 | 4.24 | 4.31 | 4.38 | 4.39 | 4.48 | 4.52 | 4.55 | 4.51 | 4.61 | 4.43 | 4.67 | 4.75 | 5.11 | 5.22 | 5.66 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Payables Turnover, Competitors2 | ||||||||||||||||||||||||
| Boeing Co. | 6.72 | 6.43 | 6.03 | 5.79 | 5.61 | 5.92 | 5.86 | 6.18 | 6.28 | 6.37 | 6.18 | 6.36 | 6.17 | 6.73 | 6.40 | 6.20 | 5.45 | 4.90 | ||||||
| Caterpillar Inc. | 4.69 | 5.07 | 5.24 | 5.31 | 5.47 | 5.44 | 5.41 | 5.54 | 5.09 | 4.68 | 4.76 | 4.81 | 4.72 | 4.43 | 4.36 | 4.61 | 4.57 | 4.46 | ||||||
| GE Aerospace | 2.72 | 2.85 | 3.07 | 4.08 | 5.01 | 2.99 | 3.27 | 3.26 | 3.41 | 3.57 | 2.98 | 3.14 | 3.14 | 3.32 | 3.32 | 3.33 | 3.35 | 3.56 | ||||||
| Honeywell International Inc. | 3.48 | 3.61 | 3.46 | 3.56 | 3.60 | 3.57 | 3.36 | 3.51 | 3.49 | 3.50 | 3.53 | 3.68 | 3.63 | 3.66 | 3.61 | 3.83 | 3.76 | 3.86 | ||||||
| Lockheed Martin Corp. | 18.06 | 16.89 | 28.85 | 19.48 | 19.07 | 17.38 | 25.56 | 15.51 | 16.97 | 17.65 | 27.25 | 21.48 | 24.07 | 21.92 | 74.34 | 37.83 | 36.15 | 30.31 | ||||||
| RTX Corp. | 4.98 | 4.89 | 5.07 | 5.40 | 5.54 | 5.60 | 5.31 | 5.37 | 5.54 | 5.42 | 5.40 | 5.82 | 5.36 | 6.28 | 5.93 | 6.06 | 6.52 | 5.67 | ||||||
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
1 Q2 2025 Calculation
Payables turnover
= (Cost of products soldQ2 2025
+ Cost of products soldQ1 2025
+ Cost of products soldQ4 2024
+ Cost of products soldQ3 2024)
÷ Accounts payable
= (4,431 + 3,930 + 3,811 + 3,899)
÷ 3,762 = 4.27
2 Click competitor name to see calculations.
The financial data reflects several key trends in the company's cost of products sold, accounts payable, and payables turnover ratio over multiple quarters from March 2021 through June 2025.
- Cost of Products Sold
- The cost of products sold exhibits a generally upward trajectory throughout the periods observed. Starting at $3,184 million in March 2021, there is a steady increase with minor fluctuations, reaching $4,431 million by June 2025. This upward trend indicates rising production costs or increased sales volume over time. Notably, the pace of increase appears somewhat accelerated in the most recent quarters, suggesting intensified cost pressures or growth in operations near the end of the period.
- Accounts Payable
- Accounts payable also shows an increasing trend, beginning at $2,172 million in March 2021 and growing to $3,762 million by June 2025. The increases occur consistently across quarters, though some periods exhibit slight deceleration or minor dips. This continuous growth implies expanded credit purchases or delayed payments to suppliers, possibly reflecting the company's procurement strategy or liquidity management over the period.
- Payables Turnover Ratio
- The payables turnover ratio decreases over time, from 5.66 in March 2021 to a range around 4.18 to 4.27 in 2025. This declining ratio suggests the company is taking longer to settle its payables, which may reflect extended payment terms or a strategic approach to managing cash flows. The ratio shows a relatively smooth decline with minor fluctuations, indicating a persistent trend rather than abrupt changes.
In summary, the data indicates that while both costs and accounts payable amounts have increased, the pace of payments to suppliers has slowed slightly based on the declining payables turnover ratio. These patterns could be interpreted as signs of growing business scale paired with a deliberate extension of payment periods, potentially to optimize working capital management. Continued monitoring would be recommended to assess the impact on supplier relationships and financial stability.
Working Capital Turnover
Eaton Corp. plc, working capital turnover calculation (quarterly data)
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Current assets | 11,897) | 12,434) | 11,801) | 12,152) | 12,652) | 11,853) | 11,675) | 10,983) | 10,303) | 9,138) | 8,746) | 8,540) | 8,687) | 8,194) | 7,511) | 7,487) | 9,789) | 9,905) | ||||||
| Less: Current liabilities | 9,594) | 9,522) | 7,857) | 7,941) | 8,120) | 7,613) | 7,747) | 7,563) | 6,725) | 6,087) | 6,360) | 6,653) | 8,974) | 8,256) | 7,212) | 5,914) | 8,906) | 6,581) | ||||||
| Working capital | 2,303) | 2,912) | 3,944) | 4,211) | 4,532) | 4,240) | 3,928) | 3,420) | 3,578) | 3,051) | 2,386) | 1,887) | (287) | (62) | 299) | 1,573) | 883) | 3,324) | ||||||
| Net sales | 7,028) | 6,377) | 6,240) | 6,345) | 6,350) | 5,943) | 5,967) | 5,880) | 5,866) | 5,483) | 5,384) | 5,313) | 5,212) | 4,843) | 4,798) | 4,923) | 5,215) | 4,692) | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Working capital turnover1 | 11.29 | 8.69 | 6.31 | 5.84 | 5.33 | 5.58 | 5.91 | 6.61 | 6.16 | 7.01 | 8.70 | 10.69 | — | — | 65.65 | 12.41 | 21.65 | 5.34 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Working Capital Turnover, Competitors2 | ||||||||||||||||||||||||
| Boeing Co. | 3.15 | 2.89 | 2.15 | 6.04 | 4.13 | 5.76 | 5.78 | 5.46 | 4.80 | 4.61 | 3.42 | 3.13 | 2.87 | 2.51 | 2.34 | 2.02 | 2.00 | 1.88 | ||||||
| Caterpillar Inc. | 5.04 | 5.73 | 4.58 | 4.89 | 6.61 | 5.64 | 5.23 | 4.27 | 5.29 | 4.25 | 4.62 | 4.35 | 3.93 | 3.83 | 3.54 | 2.87 | 2.80 | 2.52 | ||||||
| GE Aerospace | 28.44 | 13.68 | 10.83 | 9.60 | 11.15 | 6.93 | 7.24 | 8.11 | 5.70 | 5.87 | 7.93 | 13.29 | 10.55 | 7.14 | 4.94 | 1.57 | 1.57 | 1.27 | ||||||
| Honeywell International Inc. | 6.30 | 7.04 | 5.79 | 4.39 | 8.63 | 3.37 | 7.39 | 5.98 | 5.16 | 7.79 | 7.03 | 7.91 | 8.84 | 8.07 | 5.86 | 5.94 | 4.52 | 4.27 | ||||||
| Lockheed Martin Corp. | — | 44.49 | 29.25 | 13.20 | 15.88 | 13.24 | 18.85 | 11.04 | 10.56 | 12.81 | 12.93 | 14.03 | 14.28 | 15.14 | 11.52 | 10.48 | 12.30 | 11.93 | ||||||
| RTX Corp. | 257.23 | 279.93 | — | — | — | 23.64 | 41.62 | 44.25 | 16.99 | 12.76 | 20.15 | 19.15 | 17.77 | 11.41 | 9.75 | 8.11 | 10.24 | 9.77 | ||||||
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
1 Q2 2025 Calculation
Working capital turnover
= (Net salesQ2 2025
+ Net salesQ1 2025
+ Net salesQ4 2024
+ Net salesQ3 2024)
÷ Working capital
= (7,028 + 6,377 + 6,240 + 6,345)
÷ 2,303 = 11.29
2 Click competitor name to see calculations.
- Working Capital
- The working capital values show significant fluctuations over the periods analyzed. Initially, from March 2021 to December 2021, there was a sharp decline from 3324 million USD to 299 million USD, including a negative working capital in two quarters during early 2022 (-62 million and -287 million USD). Following this, a recovery trend is observable from mid-2022 onward, peaking at 4532 million USD in June 2024. After this peak, a gradual decline is noted through to June 2025, ending at 2303 million USD. Overall, working capital demonstrates a pattern of volatility with an initial steep drop, a robust recovery phase, and a subsequent moderate decline.
- Net Sales
- Net sales exhibit a generally upward trend throughout the entire timeframe. Beginning at 4692 million USD in March 2021, sales increased steadily each quarter with minor variations, reaching 7028 million USD by June 2025. This consistent growth suggests persistent demand and revenue expansion. The sales progression reflects incremental gains without abrupt swings, indicating stable revenue growth over the four-year span.
- Working Capital Turnover
- The working capital turnover ratio shows high volatility and some missing data in early 2022. Initially, the ratio is quite high, peaking at 65.65 in December 2021, implying efficient utilization of working capital at that time. There are gaps in the data during early 2022, but from September 2022 onwards, the ratio stabilizes within a narrower range between approximately 5.3 and 8.7 until mid-2024. Noteworthy is the increase in turnover ratios in the last two quarters, rising from 6.31 in December 2024 to 11.29 in June 2025, indicating improved efficiency in generating sales relative to working capital at the end of the period.
- Overall Insights
- While net sales have shown consistent growth, working capital has experienced more variability, with a notable dip in early 2022 and a peak in mid-2024 followed by a decline. The working capital turnover ratio’s initial high values and later stabilization, followed by a recent increase, indicate phases of differing operational efficiency. The combination of these trends suggests the company has navigated through periods of constrained liquidity but improved its capital efficiency and maintained steady sales expansion over the analyzed timeframe.
Average Inventory Processing Period
Eaton Corp. plc, average inventory processing period calculation (quarterly data)
| Jun 30, 2025 | Mar 31, 2025 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Inventory turnover | 3.51 | 3.55 | 3.64 | 3.66 | 3.81 | 3.85 | 3.95 | 3.93 | 3.93 | 3.94 | 4.04 | 3.95 | 3.87 | 4.03 | 4.48 | 4.73 | 4.86 | 5.12 | ||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||
| Average inventory processing period1 | 104 | 103 | 100 | 100 | 96 | 95 | 92 | 93 | 93 | 93 | 90 | 92 | 94 | 90 | 82 | 77 | 75 | 71 | ||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||
| Average Inventory Processing Period, Competitors2 | ||||||||||||||||||||||||
| Boeing Co. | 424 | 459 | 466 | 428 | 470 | 443 | 415 | 419 | 416 | 438 | 452 | 468 | 494 | 493 | 486 | 475 | 478 | 496 | ||||||
| Caterpillar Inc. | 169 | 165 | 153 | 155 | 151 | 146 | 141 | 148 | 151 | 154 | 144 | 155 | 152 | 148 | 144 | 150 | 146 | 149 | ||||||
| GE Aerospace | 160 | 156 | 147 | 111 | 89 | 141 | 120 | 121 | 116 | 110 | 114 | 118 | 120 | 112 | 107 | 114 | 111 | 105 | ||||||
| Honeywell International Inc. | 103 | 99 | 99 | 98 | 99 | 100 | 98 | 97 | 96 | 94 | 90 | 89 | 90 | 87 | 80 | 77 | 75 | 75 | ||||||
| Lockheed Martin Corp. | 20 | 20 | 20 | 19 | 18 | 20 | 19 | 20 | 22 | 22 | 20 | 20 | 23 | 20 | 19 | 18 | 20 | 21 | ||||||
| RTX Corp. | 77 | 76 | 71 | 77 | 79 | 77 | 76 | 79 | 78 | 76 | 73 | 73 | 71 | 69 | 65 | 65 | 66 | 67 | ||||||
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
1 Q2 2025 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 3.51 = 104
2 Click competitor name to see calculations.
The analysis of the inventory turnover ratio over the periods reveals a clear downward trend. Starting at 5.12, the ratio steadily declined to 3.51 by the end of the latest quarter. This decline suggests that the company is turning over its inventory less frequently, indicating either increasing inventory levels relative to sales or slower sales activity.
Correlating with the inventory turnover ratio, the average inventory processing period exhibits an opposite trend. The number of days increased from 71 days initially to 104 days in the final period. This increase in the inventory processing period means that the company is taking longer to sell its inventory, consistent with the observed decrease in inventory turnover.
- Inventory Turnover
- The ratio decreased steadily and consistently from 5.12 to 3.51 over the analyzed time frame. This points to a diminishing efficiency in the management or movement of inventory.
- Average Inventory Processing Period
- The number of days to process inventory increased from 71 to 104 days, indicating an elongation in the turnover cycle. This suggests either slower sales, overstocking, or longer holding periods for inventory items.
- Insight
- The inverse relationship between the inventory turnover ratio and the processing period is evident and aligns with typical inventory management dynamics. The data implies that the company is experiencing challenges in managing inventory efficiently which could affect working capital and overall operational performance.
Average Receivable Collection Period
Eaton Corp. plc, average receivable collection period calculation (quarterly data)
| Jun 30, 2025 | Mar 31, 2025 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Receivables turnover | 4.74 | 4.97 | 5.39 | 5.04 | 4.97 | 5.06 | 5.18 | 5.07 | 5.01 | 5.05 | 5.09 | 5.28 | 5.15 | 5.39 | 5.95 | 5.75 | 5.72 | 5.79 | ||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||
| Average receivable collection period1 | 77 | 73 | 68 | 72 | 73 | 72 | 70 | 72 | 73 | 72 | 72 | 69 | 71 | 68 | 61 | 63 | 64 | 63 | ||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||
| Average Receivable Collection Period, Competitors2 | ||||||||||||||||||||||||
| Boeing Co. | 15 | 17 | 14 | 14 | 16 | 14 | 12 | 15 | 15 | 15 | 14 | 16 | 18 | 14 | 15 | 13 | 15 | 15 | ||||||
| Caterpillar Inc. | 59 | 56 | 55 | 53 | 55 | 53 | 53 | 53 | 56 | 57 | 57 | 55 | 60 | 67 | 64 | 61 | 66 | 72 | ||||||
| GE Aerospace | 101 | 98 | 97 | 75 | 60 | 93 | 87 | 79 | 78 | 73 | 89 | 87 | 83 | 82 | 80 | 76 | 77 | 80 | ||||||
| Honeywell International Inc. | 81 | 77 | 74 | 76 | 76 | 74 | 75 | 79 | 81 | 80 | 77 | 77 | 82 | 76 | 72 | 76 | 75 | 75 | ||||||
| Lockheed Martin Corp. | 17 | 10 | 12 | 11 | 15 | 12 | 12 | 13 | 19 | 14 | 14 | 14 | 19 | 14 | 11 | 12 | 14 | 12 | ||||||
| RTX Corp. | 54 | 51 | 50 | 47 | 52 | 53 | 57 | 55 | 51 | 54 | 50 | 51 | 58 | 51 | 55 | 55 | 52 | 61 | ||||||
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
1 Q2 2025 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ 4.74 = 77
2 Click competitor name to see calculations.
- Receivables Turnover
-
The receivables turnover ratio exhibits a gradual declining trend over the analyzed periods. Starting from a relatively high point near 5.79 at the beginning of 2021, the ratio decreases with minor fluctuations to reach a value around 4.74 by the second quarter of 2025. This decline suggests a reduction in the efficiency with which receivables are being collected over time.
Noteworthy is that after an initial steady performance in early 2021, a more pronounced downward trend is evident from early 2022 onwards, indicating possible challenges or changes in credit policies, customer payment behavior, or operational factors influencing collections.
- Average Receivable Collection Period
-
The average receivable collection period demonstrates an inverse correlation with the receivables turnover ratio, confirming the slower collection trend. The number of days increased from approximately 63 days in early 2021 to a higher range around 70 to 77 days by mid-2024 through mid-2025.
This elongation of the collection period implies that on average, it takes more time for the company to convert its receivables into cash. The prolongation is gradual, with a few fluctuations but an overall consistent rise, which may reflect extended payment terms granted, slower customer payments, or other factors impacting cash flow timing.
- Overall Analysis
-
The combined movement of declining receivables turnover and increasing collection period suggests a weakening in receivables management efficiency. This trend could potentially affect liquidity and working capital management, signaling the need for a review of credit policies and collection processes.
While the changes are gradual, the persistent nature of these trends over multiple years indicates a structural shift rather than transient fluctuations. Management should consider these trends carefully to mitigate any adverse impacts on cash flow and operational funding requirements.
Operating Cycle
Eaton Corp. plc, operating cycle calculation (quarterly data)
No. days
| Jun 30, 2025 | Mar 31, 2025 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Average inventory processing period | 104 | 103 | 100 | 100 | 96 | 95 | 92 | 93 | 93 | 93 | 90 | 92 | 94 | 90 | 82 | 77 | 75 | 71 | ||||||
| Average receivable collection period | 77 | 73 | 68 | 72 | 73 | 72 | 70 | 72 | 73 | 72 | 72 | 69 | 71 | 68 | 61 | 63 | 64 | 63 | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Operating cycle1 | 181 | 176 | 168 | 172 | 169 | 167 | 162 | 165 | 166 | 165 | 162 | 161 | 165 | 158 | 143 | 140 | 139 | 134 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Operating Cycle, Competitors2 | ||||||||||||||||||||||||
| Boeing Co. | 439 | 476 | 480 | 442 | 486 | 457 | 427 | 434 | 431 | 453 | 466 | 484 | 512 | 507 | 501 | 488 | 493 | 511 | ||||||
| Caterpillar Inc. | 228 | 221 | 208 | 208 | 206 | 199 | 194 | 201 | 207 | 211 | 201 | 210 | 212 | 215 | 208 | 211 | 212 | 221 | ||||||
| GE Aerospace | 261 | 254 | 244 | 186 | 149 | 234 | 207 | 200 | 194 | 183 | 203 | 205 | 203 | 194 | 187 | 190 | 188 | 185 | ||||||
| Honeywell International Inc. | 184 | 176 | 173 | 174 | 175 | 174 | 173 | 176 | 177 | 174 | 167 | 166 | 172 | 163 | 152 | 153 | 150 | 150 | ||||||
| Lockheed Martin Corp. | 37 | 30 | 32 | 30 | 33 | 32 | 31 | 33 | 41 | 36 | 34 | 34 | 42 | 34 | 30 | 30 | 34 | 33 | ||||||
| RTX Corp. | 131 | 127 | 121 | 124 | 131 | 130 | 133 | 134 | 129 | 130 | 123 | 124 | 129 | 120 | 120 | 120 | 118 | 128 | ||||||
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
1 Q2 2025 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 104 + 77 = 181
2 Click competitor name to see calculations.
The analysis of the key financial cycle metrics over the reported periods reveals several noteworthy trends in operational efficiency and working capital management.
- Average Inventory Processing Period
- The average inventory processing period has demonstrated a consistent upward trend, increasing from 71 days at the beginning of the timeline to 104 days by the latest period. This steady increase suggests a lengthening in the time inventory remains within the company before being processed or sold, which may indicate challenges in inventory turnover or changes in inventory management policies.
- Average Receivable Collection Period
- The average receivable collection period shows moderate fluctuations but generally trends upward, starting at 63 days and reaching 77 days by the end of the period. This indicates a slower collection from customers over time, potentially impacting cash flow and credit risk management. The occasional slight decreases do not offset the overall elongation in receivables.
- Operating Cycle
- The operating cycle, which combines the inventory processing and receivables periods, has correspondingly increased from 134 days to 181 days. This steady expansion points to a lengthier duration for cash to be tied up in the working capital cycle, which may affect liquidity and the company’s operational efficiency.
Overall, the increasing trends in all measured periods suggest that the company is experiencing longer durations to convert inventory into cash. This could stem from operational challenges, changes in sales patterns, or extended credit terms offered to customers. Close monitoring and potential strategic action may be necessary to optimize working capital and maintain financial flexibility.
Average Payables Payment Period
Eaton Corp. plc, average payables payment period calculation (quarterly data)
| Jun 30, 2025 | Mar 31, 2025 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Payables turnover | 4.27 | 4.26 | 4.18 | 4.24 | 4.31 | 4.38 | 4.39 | 4.48 | 4.52 | 4.55 | 4.51 | 4.61 | 4.43 | 4.67 | 4.75 | 5.11 | 5.22 | 5.66 | ||||||
| Short-term Activity Ratio (no. days) | ||||||||||||||||||||||||
| Average payables payment period1 | 85 | 86 | 87 | 86 | 85 | 83 | 83 | 82 | 81 | 80 | 81 | 79 | 82 | 78 | 77 | 71 | 70 | 65 | ||||||
| Benchmarks (no. days) | ||||||||||||||||||||||||
| Average Payables Payment Period, Competitors2 | ||||||||||||||||||||||||
| Boeing Co. | 54 | 57 | 61 | 63 | 65 | 62 | 62 | 59 | 58 | 57 | 59 | 57 | 59 | 54 | 57 | 59 | 67 | 74 | ||||||
| Caterpillar Inc. | 78 | 72 | 70 | 69 | 67 | 67 | 67 | 66 | 72 | 78 | 77 | 76 | 77 | 82 | 84 | 79 | 80 | 82 | ||||||
| GE Aerospace | 134 | 128 | 119 | 89 | 73 | 122 | 112 | 112 | 107 | 102 | 123 | 116 | 116 | 110 | 110 | 109 | 109 | 103 | ||||||
| Honeywell International Inc. | 105 | 101 | 105 | 103 | 101 | 102 | 109 | 104 | 105 | 104 | 103 | 99 | 101 | 100 | 101 | 95 | 97 | 95 | ||||||
| Lockheed Martin Corp. | 20 | 22 | 13 | 19 | 19 | 21 | 14 | 24 | 22 | 21 | 13 | 17 | 15 | 17 | 5 | 10 | 10 | 12 | ||||||
| RTX Corp. | 73 | 75 | 72 | 68 | 66 | 65 | 69 | 68 | 66 | 67 | 68 | 63 | 68 | 58 | 62 | 60 | 56 | 64 | ||||||
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
1 Q2 2025 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 4.27 = 85
2 Click competitor name to see calculations.
- Payables Turnover Ratio
-
The payables turnover ratio demonstrates a clear downward trend over the examined periods. Beginning at 5.66 in March 2021, the ratio gradually decreases through successive quarters, reaching a value near 4.27 by June 2025. This consistent decline indicates that the company is turning over its accounts payable less frequently, suggesting potentially slower payment cycles or changes in purchasing patterns.
- Average Payables Payment Period
-
The average payables payment period shows an opposite and corresponding upward trend, increasing steadily from 65 days in March 2021 to approximately 85 days by March 2025. This growth in days payable outstanding aligns logically with the decline in payables turnover, reflecting extended times taken to settle obligations with suppliers.
- Overall Insights
-
Collectively, these trends suggest a strategic shift or operational adjustment toward longer payment periods. The extension of payment terms could improve short-term liquidity by deferring cash outflows but may also affect supplier relationships or credit terms. The changes are gradual and consistent, indicating a sustained pattern rather than abrupt fluctuations.
Cash Conversion Cycle
Eaton Corp. plc, cash conversion cycle calculation (quarterly data)
No. days
| Jun 30, 2025 | Mar 31, 2025 | 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 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||||||||||||||||||||
| Average inventory processing period | 104 | 103 | 100 | 100 | 96 | 95 | 92 | 93 | 93 | 93 | 90 | 92 | 94 | 90 | 82 | 77 | 75 | 71 | ||||||
| Average receivable collection period | 77 | 73 | 68 | 72 | 73 | 72 | 70 | 72 | 73 | 72 | 72 | 69 | 71 | 68 | 61 | 63 | 64 | 63 | ||||||
| Average payables payment period | 85 | 86 | 87 | 86 | 85 | 83 | 83 | 82 | 81 | 80 | 81 | 79 | 82 | 78 | 77 | 71 | 70 | 65 | ||||||
| Short-term Activity Ratio | ||||||||||||||||||||||||
| Cash conversion cycle1 | 96 | 90 | 81 | 86 | 84 | 84 | 79 | 83 | 85 | 85 | 81 | 82 | 83 | 80 | 66 | 69 | 69 | 69 | ||||||
| Benchmarks | ||||||||||||||||||||||||
| Cash Conversion Cycle, Competitors2 | ||||||||||||||||||||||||
| Boeing Co. | 385 | 419 | 419 | 379 | 421 | 395 | 365 | 375 | 373 | 396 | 407 | 427 | 453 | 453 | 444 | 429 | 426 | 437 | ||||||
| Caterpillar Inc. | 150 | 149 | 138 | 139 | 139 | 132 | 127 | 135 | 135 | 133 | 124 | 134 | 135 | 133 | 124 | 132 | 132 | 139 | ||||||
| GE Aerospace | 127 | 126 | 125 | 97 | 76 | 112 | 95 | 88 | 87 | 81 | 80 | 89 | 87 | 84 | 77 | 81 | 79 | 82 | ||||||
| Honeywell International Inc. | 79 | 75 | 68 | 71 | 74 | 72 | 64 | 72 | 72 | 70 | 64 | 67 | 71 | 63 | 51 | 58 | 53 | 55 | ||||||
| Lockheed Martin Corp. | 17 | 8 | 19 | 11 | 14 | 11 | 17 | 9 | 19 | 15 | 21 | 17 | 27 | 17 | 25 | 20 | 24 | 21 | ||||||
| RTX Corp. | 58 | 52 | 49 | 56 | 65 | 65 | 64 | 66 | 63 | 63 | 55 | 61 | 61 | 62 | 58 | 60 | 62 | 64 | ||||||
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
1 Q2 2025 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 104 + 77 – 85 = 96
2 Click competitor name to see calculations.
The analysis of the financial metrics over the observed periods reveals several noteworthy trends in working capital management.
- Average inventory processing period
- The inventory processing period shows a general upward trend, increasing from 71 days at the beginning of 2021 to 104 days by mid-2025. This gradual elongation suggests that the company is holding inventory for longer periods, which may indicate slower inventory turnover or accumulation of stock.
- Average receivable collection period
- The collection period for receivables remains relatively stable with minor fluctuations, averaging in the low 60s days during 2021 and gradually increasing to the mid-70s days by mid-2025. This indicates a slight lengthening in the time taken to collect payments from customers, potentially impacting cash inflows mildly over time.
- Average payables payment period
- The payment period to suppliers also demonstrates an increasing trend, moving from 65 days early in 2021 to around 85-87 days towards mid-2025. This suggests that the company is taking longer to settle its obligations, which could be a strategy to optimize cash outflows or reflect changes in supplier terms.
- Cash conversion cycle
- The cash conversion cycle fluctuates during the period but shows an overall increase from 69 days in early 2021 to 96 days by mid-2025. Despite some declines in late 2023, the upward trend indicates a longer time is needed to convert invested cash back into cash received from sales. This may reflect the effects of increasing inventory and receivables periods outweighing the extension in payables.
In summary, the working capital cycle is elongating over time, driven primarily by increasing inventory holding and slightly longer receivables collection periods. While the company is extending its payable days, this increase is not sufficient to offset the overall rise in the cash conversion cycle. These trends suggest growing capital tied up in operations, potentially influencing liquidity and operational efficiency.