Graco Inc (GGG)
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 | 149.07 | 162.86 | 166.99 | 164.93 | 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 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 149.07 | 162.86 | 166.99 | 164.93 | 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 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 149.07 + — – —
= 149.07
The cash conversion cycle of Graco Inc has exhibited fluctuations over the analyzed period. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
The trend in Graco Inc's cash conversion cycle shows an increase from 136.84 days on March 31, 2020, to a peak of 166.99 days on June 30, 2024, before decreasing to 149.07 days on December 31, 2024. This indicates that the company took longer to convert its investments back into cash during the peak period mid-2024.
A longer cash conversion cycle can signal inefficiencies in managing inventory, collecting receivables, or paying suppliers, potentially leading to increased working capital needs or liquidity challenges. Conversely, a shorter cycle is generally more favorable as it implies faster cash turnover and more efficient operations.
Overall, Graco Inc should closely monitor and optimize its cash conversion cycle to ensure a healthy balance between operational efficiency and working capital management, which is crucial to sustaining financial health and stability.
Peer comparison
Dec 31, 2024