General Dynamics Corporation (GD)
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 | 1,027.58 | 1,091.56 | 1,052.51 | 1,053.26 | 951.66 | 923.03 | 859.05 | 784.90 | 700.31 | 700.77 | 692.02 | 633.41 | 621.72 | 665.36 | 690.61 | 671.01 | 677.96 | 197.54 | 122.34 | 89.94 |
| Days of sales outstanding (DSO) | days | 85.86 | 95.22 | 95.15 | 98.52 | 94.99 | 101.97 | 102.32 | — | 109.32 | — | — | — | 109.48 | — | — | — | — | — | — | — |
| Number of days of payables | days | 353.38 | 354.13 | 322.62 | 351.82 | 343.37 | 369.46 | 378.26 | 363.88 | 376.41 | 347.86 | 352.64 | 364.20 | 368.73 | 315.78 | 308.83 | 322.77 | 348.36 | 80.63 | 43.73 | 36.60 |
| Cash conversion cycle | days | 760.07 | 832.65 | 825.04 | 799.96 | 703.29 | 655.54 | 583.11 | 421.02 | 433.23 | 352.90 | 339.38 | 269.21 | 362.48 | 349.58 | 381.78 | 348.25 | 329.60 | 116.91 | 78.60 | 53.35 |
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 been fluctuating over the years, indicating the efficiency of its cash management and working capital operations. The cycle measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
The trend of the cash conversion cycle shows an initial improvement from March 31, 2020, to September 30, 2020, indicating better efficiency in managing working capital. However, from December 31, 2020, onwards, the cycle experienced a significant increase, reaching its peak at 832.65 days on September 30, 2024, before declining slightly by December 31, 2024, to 760.07 days.
The prolonged cash conversion cycle may imply challenges in converting inventory and accounts receivable into cash, potentially leading to liquidity constraints and increased working capital needs. It is essential for General Dynamics to focus on optimizing its inventory management, accounts receivable collection, and payment practices to shorten the cycle and improve cash flow.
Overall, the analysis of General Dynamics Corporation's cash conversion cycle highlights the importance of efficiently managing working capital to enhance liquidity and financial performance.
Peer comparison
Dec 31, 2024
See also:
General Dynamics Corporation Cash Conversion Cycle (Quarterly Data)