General Motors Company (GM)
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 | 2,409.09 | 5,136.07 | 43.31 | 35.44 | 31.62 |
| Days of sales outstanding (DSO) | days | 26.29 | 31.05 | 21.25 | 23.94 | 18.08 |
| Number of days of payables | days | 4,114.52 | 9,187.17 | 68.00 | 68.99 | 63.91 |
| Cash conversion cycle | days | -1,679.14 | -4,020.05 | -3.44 | -9.61 | -14.22 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 2,409.09 + 26.29 – 4,114.52
= -1,679.14
The cash conversion cycle of General Motors Company has shown a significant improvement over the last five years. The company's cash conversion cycle decreased from -16.95 days in 2019 to -3.80 days in 2023. This indicates that General Motors has been able to manage its cash flows and working capital more efficiently, resulting in a shorter cash conversion cycle.
A negative cash conversion cycle suggests that the company is able to collect cash from customers before paying its suppliers, allowing it to operate with negative working capital. This indicates strong liquidity and efficient management of operating cash flows.
The improvement in the cash conversion cycle over the years suggests that General Motors has been successful in optimizing its cash management processes, reducing the time it takes to convert its inventory and receivables into cash, and extending the time it takes to pay its suppliers. This improved efficiency in managing working capital reflects positively on the company's overall financial health and operational effectiveness.
Peer comparison
Dec 31, 2023