GATX Corporation (GATX)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	45.52	36.44	33.49	28.64	28.79
Days of sales outstanding (DSO)	days	22.74	20.47	20.26	22.55	26.45
Number of days of payables	days	—	—	—	—	—
Cash conversion cycle	days	68.26	56.91	53.75	51.18	55.24

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 45.52 + 22.74 – —
= 68.26

The cash conversion cycle of GATX Corp. has shown some variability over the past five years. In 2023, it increased to 56.50 days from 46.45 days in 2022, reflecting a lengthening in the time it takes for the company to convert its investments in inventory and accounts receivable into cash receipts from customers. This may indicate potential challenges in managing working capital efficiently during the year.

Comparing 2023 to earlier years, the cash conversion cycle was higher than the 47.55 days in 2021, 42.92 days in 2020, and 44.83 days in 2019. This upward trend suggests a gradual deterioration in the company's ability to quickly convert its resources into cash. It is essential for GATX Corp. to closely monitor and improve its inventory management, accounts receivable collection, and payment practices to enhance cash flow efficiency and overall financial performance going forward.