Graco Inc (GGG)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 154.65 | 160.24 | 146.32 | 131.14 | 126.84 |
| Days of sales outstanding (DSO) | days | 58.92 | 58.92 | 59.71 | 69.66 | 59.28 |
| Number of days of payables | days | 25.48 | 28.30 | 30.02 | 26.76 | 25.12 |
| Cash conversion cycle | days | 188.09 | 190.85 | 176.01 | 174.04 | 161.00 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 154.65 + 58.92 – 25.48
= 188.09
The cash conversion cycle of Graco Inc has shown some fluctuations over the past five years. In 2023, the cash conversion cycle was 188.09 days, a slight improvement from 190.85 days in 2022. This indicates that in 2023, Graco took approximately 188 days to convert its investments in inventory and other resources into cash inflows from sales.
Comparing 2023 to the previous years, we can see that the cash conversion cycle has been on a generally increasing trend since 2019 when it stood at 161 days. This suggests that Graco has been taking longer to convert its resources into cash over time, which may indicate inefficiencies in its working capital management or possibly changes in its business operations.
It's important for Graco Inc to closely monitor and manage its cash conversion cycle to ensure efficient use of its resources and timely realization of cash inflows from its sales. Analyzing the factors contributing to the lengthening of the cash conversion cycle can help identify areas for improvement and optimization in the company's operations.
Peer comparison
Dec 31, 2023