Graphic Packaging Holding Company (GPK)
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 | 83.08 | 77.55 | 68.66 | 74.77 | 75.41 |
| Days of sales outstanding (DSO) | days | 31.46 | 32.33 | 33.99 | 43.81 | 36.39 |
| Number of days of payables | days | 52.86 | 48.37 | 48.01 | 60.64 | 55.15 |
| Cash conversion cycle | days | 61.68 | 61.51 | 54.64 | 57.94 | 56.64 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 83.08 + 31.46 – 52.86
= 61.68
The cash conversion cycle of Graphic Packaging Holding Company has experienced fluctuations over the years. As of December 31, 2020, the company's cash conversion cycle was 56.64 days, which increased slightly to 57.94 days by December 31, 2021. However, the cycle decreased to 54.64 days by December 31, 2022, indicating improvement in efficiently managing its working capital.
Subsequently, there was a notable increase in the cash conversion cycle to 61.51 days by December 31, 2023, which further extended to 61.68 days by December 31, 2024. These increases suggest a lengthening of the time it takes for Graphic Packaging Holding Company to convert its investments in inventory and other resources into cash receipts from customers.
Overall, the company's cash conversion cycle trend indicates some fluctuations, with periods of improvement followed by lengthening cycles, which could reflect variations in operational efficiency, sales, inventory management, and payment terms with suppliers and customers. Tracking this metric over time can provide insights into the company's working capital management strategies and operational performance.
Peer comparison
Dec 31, 2024