GE HealthCare Technologies Inc. (GEHC)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | ||
|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 165.71 | 177.45 | 170.45 | 168.17 | 165.72 | 126.98 |
| Days of sales outstanding (DSO) | days | 1.95 | — | — | — | — | 0.11 |
| Number of days of payables | days | 258.26 | 243.19 | 237.94 | 247.81 | 249.17 | 165.52 |
| Cash conversion cycle | days | -90.60 | -65.75 | -67.49 | -79.65 | -83.45 | -38.43 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 165.71 + 1.95 – 258.26
= -90.60
Based on the provided data, GE HealthCare Technologies Inc. has demonstrated a consistently negative cash conversion cycle over the reported periods, with values ranging from -38.43 days to -90.60 days. The negative values indicate that the company is efficiently managing its working capital, as it takes fewer days to convert its resources (inventory and receivables) into cash.
The decreasing trend in the cash conversion cycle from September 2023 to December 2024 suggests that GE HealthCare Technologies Inc. has been improving its efficiency in managing its cash flows and working capital. This can be attributed to effective inventory management, prompt collection of receivables, and possibly extending payment terms to suppliers.
Overall, a negative cash conversion cycle indicates that the company is able to generate cash quickly from its operational activities, which is considered beneficial for its liquidity and financial health. It implies that GE HealthCare Technologies Inc. can fund its operations using internal resources without relying heavily on external financing.
Peer comparison
Dec 31, 2024