GE HealthCare Technologies Inc. (GEHC)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | ||
|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 165.82 | 165.76 | 188.31 |
| Days of sales outstanding (DSO) | days | 1.95 | — | 68.37 |
| Number of days of payables | days | 258.44 | 249.22 | 257.26 |
| Cash conversion cycle | days | -90.67 | -83.47 | -0.57 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 165.82 + 1.95 – 258.44
= -90.67
The cash conversion cycle of GE HealthCare Technologies Inc. over the years reflects a negative trend, starting at -0.57 days on December 31, 2022, deepening to -83.47 days by December 31, 2023, and further decreasing to -90.67 days by December 31, 2024. This indicates that the company is efficiently managing its working capital as it takes less time to convert its investments in inventory to cash received from sales. A negative cash conversion cycle signifies that the company is able to collect payments from customers before paying its suppliers, demonstrating a strong liquidity position and effective working capital management. However, the significant decrease over the years warrants further investigation to ensure that the company continues to maintain a healthy balance between liquidity and operational efficiency.
Peer comparison
Dec 31, 2024