Genuine Parts Co (GPC)
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 | 133.63 | 134.46 | 124.63 | 116.44 | 114.65 | 110.57 | 111.47 | 114.19 | 112.93 | 112.81 | 117.65 | 120.27 | 116.03 | 114.68 | 115.13 | 118.38 | 113.89 | 108.02 | 101.08 | 104.61 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 133.63 | 134.46 | 124.63 | 116.44 | 114.65 | 110.57 | 111.47 | 114.19 | 112.93 | 112.81 | 117.65 | 120.27 | 116.03 | 114.68 | 115.13 | 118.38 | 113.89 | 108.02 | 101.08 | 104.61 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 133.63 + — – —
= 133.63
The cash conversion cycle of Genuine Parts Co has shown fluctuations over the quarters from March 31, 2020, to December 31, 2024. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flow from sales.
In the initial periods, from March 31, 2020, to March 31, 2021, the cash conversion cycle increased steadily from 104.61 days to 118.38 days. This suggests a lengthening of the time it takes for Genuine Parts Co to convert its investments into cash. However, in the subsequent periods, the cycle fluctuated slightly around the higher range, indicating some stabilization in the company's cash conversion efficiency.
From December 31, 2022, to June 30, 2024, there was a significant spike in the cash conversion cycle, reaching its peak at 134.46 days on September 30, 2024. This prolonged cycle may indicate challenges in managing inventory, sales collection, or payment policies during this period.
Overall, Genuine Parts Co's cash conversion cycle has experienced fluctuations, with periods of increase and stabilization. Management may need to focus on optimizing inventory management, sales collection processes, and payment terms to improve the efficiency of the cash conversion cycle and enhance the company's liquidity position.