GATX Corporation (GATX)
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 | 459.77 | — | — | — | 45.52 | — | — | — | 36.44 | — | 366.66 | — | 33.40 | — | — | — | 28.54 | — | — | — |
| Days of sales outstanding (DSO) | days | 45.84 | 22.25 | 23.65 | 24.21 | 22.74 | 20.11 | 19.27 | 19.95 | 20.47 | 20.64 | 19.75 | 20.12 | 20.26 | 22.11 | 24.67 | 24.56 | 22.55 | 21.39 | 21.73 | 23.46 |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 505.61 | 22.25 | 23.65 | 24.21 | 68.26 | 20.11 | 19.27 | 19.95 | 56.91 | 20.64 | 386.41 | 20.12 | 53.67 | 22.11 | 24.67 | 24.56 | 51.09 | 21.39 | 21.73 | 23.46 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 459.77 + 45.84 – —
= 505.61
The cash conversion cycle of GATX Corporation, which measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales, shows some fluctuations over the observed period.
From March 31, 2020, to June 30, 2021, the cash conversion cycle remained relatively stable, ranging between 21.39 days and 24.67 days. This indicates efficient management of working capital during this period.
However, from December 31, 2021, to June 30, 2022, there was a significant spike in the cash conversion cycle, reaching as high as 386.41 days. This suggests possible issues with inventory management or delays in collecting receivables, which can strain the company's liquidity position.
Subsequently, GATX Corporation managed to bring down the cash conversion cycle to around 20-24 days from March 31, 2023, to December 31, 2024, showing efforts to improve working capital efficiency.
Overall, while the company experienced periods of inefficiencies in its cash conversion cycle, it appears to have addressed these challenges and maintained a more stable cycle towards the end of the observed period. Monitoring and managing the cash conversion cycle is crucial for ensuring optimal utilization of resources and maintaining healthy cash flow levels.
Peer comparison
Dec 31, 2024