Graphic Packaging Holding Company (GPK)

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 77.73 75.64 74.25 73.14 69.40 69.29 72.15 75.34 74.77 69.06 67.01 71.75 75.41 79.20 84.22 81.71 78.94 77.00 79.39 77.28
Days of sales outstanding (DSO) days 32.33 33.62 35.23 34.67 33.99 35.85 41.41 44.49 43.81 34.41 32.13 32.36 36.39 42.21 40.04 36.47 29.89 35.13 38.29 39.04
Number of days of payables days 48.48 41.01 42.77 43.41 48.53 44.26 47.44 51.50 60.64 52.04 50.76 49.81 55.15 50.70 47.95 44.73 51.58 45.03 46.55 44.18
Cash conversion cycle days 61.58 68.25 66.71 64.40 54.86 60.88 66.12 68.34 57.94 51.43 48.38 54.30 56.64 70.72 76.31 73.45 57.25 67.11 71.13 72.14

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 77.73 + 32.33 – 48.48
= 61.58

The cash conversion cycle of Graphic Packaging Holding Co has exhibited fluctuations over the past eight quarters, as shown in the table. The company's cash conversion cycle, which represents the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales, ranged from a low of 57.15 days in Q4 2022 to a high of 72.62 days in Q3 2023.

A lower cash conversion cycle indicates a more efficient management of working capital, as the company is able to quickly convert its investments back into cash. Conversely, a higher cash conversion cycle suggests a longer cash cycle, which may tie up a company's funds in inventory or accounts receivable for a longer period.

Overall, the trend in Graphic Packaging Holding Co's cash conversion cycle appears to have shown some variability, possibly influenced by factors such as changes in inventory management, sales trends, and payment terms with customers. Further analysis and monitoring of the cash conversion cycle in relation to industry benchmarks and historical performance could provide insights into the company's working capital management efficiency.


Peer comparison

Dec 31, 2023

Company name
Symbol
Cash conversion cycle
Graphic Packaging Holding Company
GPK
61.58
Packaging Corp of America
PKG
82.36
Smurfit WestRock plc
SW
0.00
Sonoco Products Company
SON
52.41