Greenbrier Companies Inc (GBX)
Cash conversion cycle
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 85.82 | 111.38 | 138.08 | 79.24 | 90.97 |
| Days of sales outstanding (DSO) | days | 3.91 | 4.88 | 23.42 | 1.19 | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 89.72 | 116.26 | 161.49 | 80.43 | 90.97 |
August 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 85.82 + 3.91 – —
= 89.72
The cash conversion cycle of Greenbrier Cos., Inc. has fluctuated over the past five years, indicating varying efficiency in managing its cash flow from operations, inventory, and accounts receivable.
In 2023, the cash conversion cycle decreased to 97.42 days from 122.85 days in 2022. This suggests an improvement in the company's ability to convert its resources into cash. However, in 2021, the cash conversion cycle was significantly longer at 161.65 days, indicating inefficiencies in managing liquidity and working capital.
The trend in the cash conversion cycle indicates that Greenbrier Cos., Inc. has experienced fluctuations in the time it takes to convert its investments in inventory and accounts receivable into cash. This could be due to changes in sales volumes, inventory management practices, or the collection of receivables.
Overall, the company should focus on optimizing its cash conversion cycle to ensure efficient management of working capital and liquidity, which can positively impact its financial performance and profitability.
Peer comparison
Aug 31, 2023