Group 1 Automotive Inc (GPI)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 57.65 | 48.25 | 37.35 | 35.47 | 58.99 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 57.65 | 48.25 | 37.35 | 35.47 | 58.99 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 57.65 + — – —
= 57.65
The cash conversion cycle of Group 1 Automotive Inc has shown a fluctuating trend over the past five years. In December 2020, the company had a cash conversion cycle of 58.99 days, indicating that it took nearly 59 days for the company to convert its investments in inventory back into cash.
Over the following years, there was a general downward trend in the cash conversion cycle. By December 2021, the cycle had decreased to 35.47 days, suggesting that the company was able to more efficiently manage its inventory, accounts receivable, and accounts payable to convert assets into cash quicker.
Although there was a slight increase in the cash conversion cycle in December 2022 to 37.35 days, it remained significantly lower than the initial figure in 2020. This implies that Group 1 Automotive Inc continued to optimize its processes and effectively manage its working capital.
However, in December 2023 and 2024, there was a notable increase in the cash conversion cycle to 48.25 days and 57.65 days, respectively. This may indicate challenges in managing working capital efficiency, which could potentially impact the company's liquidity and overall financial health.
Overall, while there have been fluctuations in the cash conversion cycle of Group 1 Automotive Inc, the company should focus on maintaining efficient working capital management to ensure timely conversion of investments into cash and sustain its financial stability in the long term.
Peer comparison
Dec 31, 2024