General Motors Company (GM)

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	2,409.09	2,929.91	3,049.38	3,250.59	5,140.78	54.55	56.16	49.45	43.31	50.43	45.49	41.90	35.44	33.30	31.28	32.80	31.65	32.59	31.67	24.26
Days of sales outstanding (DSO)	days	26.29	29.55	30.25	31.11	31.05	34.76	34.31	33.41	21.25	22.55	21.35	27.25	23.94	31.33	25.05	20.36	18.08	17.45	26.06	30.33
Number of days of payables	days	4,114.52	5,018.67	5,073.23	5,295.79	9,195.59	89.61	86.24	84.11	68.00	64.71	74.42	71.01	68.99	63.70	46.11	60.84	63.98	59.14	62.86	53.64
Cash conversion cycle	days	-1,679.14	-2,059.21	-1,993.59	-2,014.09	-4,023.76	-0.29	4.23	-1.25	-3.44	8.28	-7.57	-1.86	-9.61	0.93	10.22	-7.67	-14.25	-9.10	-5.12	0.94

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 measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A negative cash conversion cycle indicates that a company is able to collect cash from its sales before it pays for its inventory, which is considered favorable.

Looking at the financial data for General Motors Company, the trend in the cash conversion cycle shows significant fluctuation over the past eight quarters. During the periods ending in December 2023 and September 2023, the cash conversion cycle was negative, indicating that the company was able to collect cash from sales before paying for its inventory. This suggests strong efficiency in managing working capital.

In contrast, the cash conversion cycle was positive in the periods ending in June 2023, March 2023, and December 2022. During these periods, the company took longer to convert its investments in inventory into cash from sales. However, it's important to note that the cash conversion cycle improved significantly in the March 2022 quarter.

Overall, the trend of negative cash conversion cycles in recent quarters is a positive sign, as it indicates efficient management of working capital and the ability to quickly convert inventory into cash. It's worth keeping an eye on future developments to see if the company continues to improve its cash conversion cycle and maintain efficient working capital management.