GATX Corporation (GATX)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 108.03 | 45.52 | 36.44 | 33.49 | 28.64 |
| Days of sales outstanding (DSO) | days | 45.84 | 22.74 | 20.47 | 20.26 | 22.55 |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 153.86 | 68.26 | 56.91 | 53.75 | 51.18 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 108.03 + 45.84 – —
= 153.86
The cash conversion cycle of GATX Corporation has shown a gradual increase over the years, indicating a lengthening period for the company's operating cycle. In 2020, the cash conversion cycle stood at 51.18 days, which increased to 53.75 days in 2021 and further to 56.91 days in 2022. However, there was a notable jump in 2023 with the cycle reaching 68.26 days. The most significant spike was observed in 2024, where the cash conversion cycle extended to 153.86 days.
This trend suggests that GATX Corporation may be experiencing challenges in managing its working capital efficiently. A lengthening cash conversion cycle can indicate delays in converting inventory into sales, collecting accounts receivable, or paying accounts payable. It is imperative for the company to assess and potentially streamline its working capital management strategies to optimize its cash flow and liquidity position in the future.
Peer comparison
Dec 31, 2024