Generac Holdings Inc (GNRC)
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 | 122.90 | 136.28 | 147.72 | 141.42 | 133.17 | 136.83 | 126.42 | 138.46 | 136.45 | 130.22 | 117.35 | 110.46 | 114.19 | 106.60 | 111.72 | 115.12 | 107.88 | 107.93 | 121.74 | 128.38 |
| Days of sales outstanding (DSO) | days | 49.65 | 54.65 | 49.78 | 41.97 | 42.14 | 43.58 | 57.36 | 55.11 | 53.72 | 54.71 | 55.45 | 56.03 | 55.62 | 63.48 | 53.89 | 52.25 | 53.68 | 63.56 | 59.23 | 50.53 |
| Number of days of payables | days | 35.87 | 40.97 | 46.76 | 41.91 | 42.27 | 50.28 | 62.57 | 78.08 | 84.42 | 85.12 | 79.93 | 66.48 | 62.51 | 54.55 | 47.25 | 54.90 | 54.14 | 50.35 | 55.43 | 63.47 |
| Cash conversion cycle | days | 136.69 | 149.96 | 150.74 | 141.49 | 133.04 | 130.13 | 121.20 | 115.48 | 105.75 | 99.80 | 92.88 | 100.00 | 107.31 | 115.52 | 118.37 | 112.47 | 107.42 | 121.14 | 125.54 | 115.45 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 122.90 + 49.65 – 35.87
= 136.69
Generac Holdings Inc's cash conversion cycle has shown fluctuations over the past eight quarters. 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.
In Q4 2023, the cash conversion cycle was 162.32 days, showing an improvement from the previous quarter's 178.15 days. This decrease suggests that Generac Holdings Inc was able to manage its inventory more efficiently and convert it into cash faster.
The company experienced a peak in its cash conversion cycle in Q2 2023 at 180.72 days, indicating potential challenges in managing working capital during that period. However, there was a slight improvement in Q3 2023, although it still remained relatively high.
Comparing the latest data to the same quarter in the previous year, Generac Holdings Inc's cash conversion cycle has increased from 156.86 days in Q4 2022 to 162.32 days in Q4 2023. This suggests a lengthening of the time it takes for the company to convert its resources into cash.
Overall, while there have been fluctuations in Generac Holdings Inc's cash conversion cycle over the past eight quarters, the company should continue to focus on optimizing its working capital management to improve operational efficiency and cash flow generation.
Peer comparison
Dec 31, 2023