Graphic Packaging Holding Company (GPK)
Cash conversion cycle
| Dec 31, 2024 | Sep 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 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 83.15 | 80.70 | 76.56 | 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 |
| Days of sales outstanding (DSO) | days | 31.41 | 39.06 | 34.65 | 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 |
| Number of days of payables | days | 52.91 | 43.26 | 42.28 | 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 |
| Cash conversion cycle | days | 61.66 | 76.50 | 68.93 | 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 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 83.15 + 31.41 – 52.91
= 61.66
The cash conversion cycle of Graphic Packaging Holding Company has shown some fluctuations over the years. From December 31, 2019, to December 31, 2024, the cycle ranged from a low of 48.38 days to a high of 76.50 days. Overall, there seems to be an upward trend in the cash conversion cycle, indicating that the company may be taking longer to convert its investments in inventory into cash during this period.
The company's ability to efficiently manage its working capital and convert its assets into cash is crucial for its financial health. A longer cash conversion cycle may suggest that the company is facing challenges in managing its inventory, receivables, and payables effectively.
It is important for Graphic Packaging Holding Company to closely monitor and analyze the components of the cash conversion cycle, such as inventory turnover, accounts receivable turnover, and accounts payable turnover, to identify areas for improvement and optimize its working capital management. By reducing the cash conversion cycle, the company can enhance its liquidity position and operational efficiency.
Peer comparison
Dec 31, 2024