General Dynamics Corporation (GD)
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 | 1,027.58 | 951.66 | 700.31 | 621.72 | 683.04 |
| Days of sales outstanding (DSO) | days | 85.86 | 94.99 | 109.32 | 109.48 | 107.65 |
| Number of days of payables | days | 353.38 | 343.37 | 376.41 | 368.73 | 350.97 |
| Cash conversion cycle | days | 760.07 | 703.29 | 433.23 | 362.48 | 439.71 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 1,027.58 + 85.86 – 353.38
= 760.07
General Dynamics Corporation's cash conversion cycle has shown fluctuations over the past five years. In 2020, the cash conversion cycle was 439.71 days, which decreased to 362.48 days by the end of 2021, indicating an improvement in the efficiency of the company's working capital management.
However, in 2022, the cash conversion cycle increased to 433.23 days, and then significantly jumped to 703.29 days by the end of 2023. This substantial increase suggests potential challenges in managing the company's cash flow, inventory turnover, and accounts receivable.
By the end of 2024, the cash conversion cycle further increased to 760.07 days, indicating a prolonged period for General Dynamics Corporation to convert its investments in inventory and receivables into cash. This trend may signal inefficiencies in the company's working capital management, potentially impacting its liquidity and overall financial performance.
Peer comparison
Dec 31, 2024