GE Aerospace (GE)

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	289.06	177.68	167.55	289.59	137.60	269.57	256.36	242.25	203.12	249.74	165.48	115.59	91.43	94.73	92.27	85.30	78.27	66.58	65.77	61.56
Days of sales outstanding (DSO)	days	87.96	87.33	83.00	151.13	75.64	107.54	98.83	86.58	93.17	101.94	90.50	83.93	76.84	73.78	75.50	77.88	80.34	83.05	72.47	114.54
Number of days of payables	days	234.16	143.14	136.37	172.51	124.84	169.36	160.91	150.29	170.22	—	—	—	63.30	—	—	—	—	62.19	58.08	60.58
Cash conversion cycle	days	142.85	121.87	114.18	268.21	88.39	207.75	194.28	178.55	126.07	351.68	255.98	199.52	104.98	168.51	167.76	163.18	158.61	87.44	80.15	115.52

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 289.06 + 87.96 – 234.16
= 142.85

The cash conversion cycle of GE Aerospace has shown fluctuations over the period from March 31, 2020, to December 31, 2024. Initially, the company had a cash conversion cycle of 115.52 days on March 31, 2020, which decreased to 80.15 days by June 30, 2020. However, there was an increase in the cycle to 158.61 days by December 31, 2020, indicating a potential issue in managing cash flow efficiently.

Subsequently, the cash conversion cycle fluctuated further, reaching a peak of 351.68 days on September 30, 2022. Such a prolonged cash conversion cycle could suggest inefficiencies in managing accounts receivable, inventory, and accounts payable.

There was a significant improvement by March 31, 2024, with the cash conversion cycle falling to 268.21 days, indicating better liquidity management. Overall, GE Aerospace needs to focus on optimizing its cash conversion cycle to enhance its working capital efficiency and financial performance.