Graco Inc (GGG)
Cash conversion cycle
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 154.65 | 159.05 | 161.99 | 166.39 | 160.24 | 157.83 | 160.93 | 161.56 | 146.32 | 144.92 | 139.05 | 137.54 | 131.14 | 134.04 | 140.82 | 136.84 | 126.84 | 134.86 | 138.82 | 139.98 |
| Days of sales outstanding (DSO) | days | 58.92 | 58.91 | 60.97 | 59.72 | 58.92 | 62.44 | 65.82 | 61.09 | 59.71 | 61.70 | 69.10 | 68.16 | 69.67 | 72.22 | 66.47 | 61.89 | 59.28 | 61.74 | 64.16 | 63.87 |
| Number of days of payables | days | 25.48 | 26.16 | 27.57 | 26.90 | 28.30 | 33.81 | 30.49 | 32.59 | 30.02 | 34.68 | 31.34 | 29.23 | 26.76 | 26.20 | 23.32 | 30.40 | 25.12 | 25.65 | 28.91 | 31.66 |
| Cash conversion cycle | days | 188.09 | 191.81 | 195.39 | 199.21 | 190.85 | 186.46 | 196.26 | 190.06 | 176.01 | 171.94 | 176.81 | 176.47 | 174.04 | 180.05 | 183.97 | 168.33 | 161.00 | 170.95 | 174.07 | 172.19 |
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 for Graco Inc has shown fluctuations over the past twenty quarters, ranging from a low of 161.00 days in March 2020 to a high of 199.21 days in March 2023. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
A longer cash conversion cycle suggests that the company is taking longer to sell its inventory and collect cash from customers, which can indicate inefficiencies in inventory management or accounts receivable processes. On the other hand, a shorter cash conversion cycle indicates that the company is able to swiftly convert its investments into cash, which is generally viewed favorably.
Graco Inc's cash conversion cycle has generally been above the 170-day mark, suggesting that the company may have room for improvement in optimizing its working capital management. Monitoring and analyzing this metric can help the company identify areas for operational improvement and enhance its overall financial performance.
Peer comparison
Dec 31, 2023