Graham Holdings Co (GHC)
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 | 125.07 | 722.31 | 3,098.53 | 8,122.03 | — | — | — | — | — | — | — | 1,617.74 | 741.46 | — | — | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 41.70 | 43.71 | 38.49 | 44.02 | 51.05 | 52.47 | 51.07 | 54.91 | 71.12 | 67.08 | 62.52 | 65.50 | 69.73 | 62.63 | 59.10 | 66.44 | 75.44 | 75.66 | 68.36 | 67.73 |
| Number of days of payables | days | 65.01 | 353.04 | 1,615.74 | 4,413.81 | — | — | — | — | — | — | — | — | 652.90 | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 101.75 | 412.98 | 1,521.28 | 3,752.24 | 51.05 | 52.47 | 51.07 | 54.91 | 71.12 | 67.08 | 62.52 | 1,683.23 | 158.29 | 62.63 | 59.10 | 66.44 | 75.44 | 75.66 | 68.36 | 67.73 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 125.07 + 41.70 – 65.01
= 101.75
The cash conversion cycle of Graham Holdings Co. has displayed fluctuations over the past eight quarters. The cycle, representing the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales, has ranged from 56.34 days to 68.23 days.
In Q2 2022, the company had the lowest cash conversion cycle of 58.84 days, indicating efficient management of inventory and collection of receivables. However, in Q3 2022 and Q4 2022, the cycle increased to 68.23 days and 65.47 days, respectively, suggesting potential challenges in converting investments into cash within a reasonable timeframe.
Throughout 2023, the cash conversion cycle hovered around 60 to 63 days, reflecting a relatively stable performance in terms of working capital management. Q2 2023 recorded the lowest cycle at 56.34 days, indicating improved efficiency compared to the previous quarters.
Overall, Graham Holdings Co. should continue monitoring and optimizing its cash conversion cycle to ensure timely conversion of investments into cash, which is crucial for sustaining operations and supporting future growth initiatives.
Peer comparison
Dec 31, 2023