Green Brick Partners Inc (GRBK)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	455.15	420.55	422.13	415.81	441.80
Days of sales outstanding (DSO)	days	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—
Cash conversion cycle	days	455.15	420.55	422.13	415.81	441.80

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 455.15 + — – —
= 455.15

The cash conversion cycle of Green Brick Partners Inc has shown varying trends over the past five years.

In 2023, the cash conversion cycle increased to 441.21 days, indicating that the company took longer to convert its investments in inventory and accounts receivable into cash during the year. This may imply inefficiencies in managing inventory and collecting receivables, which could potentially strain the company's liquidity position.

Comparatively, in 2022 and 2021, the company's cash conversion cycle remained relatively stable at 406.33 days and 407.90 days, respectively. This suggests consistent efficiency in managing working capital during these years.

In 2020, the cash conversion cycle was slightly lower at 405.70 days, indicating a marginal improvement in the company's ability to convert its operating cycle into cash compared to the previous years.

The highest cash conversion cycle was observed in 2019 at 426.36 days. This suggests that the company faced challenges in efficiently managing its working capital, potentially leading to increased operational risks and cash flow constraints during that period.

Overall, Green Brick Partners Inc's cash conversion cycle has shown fluctuations over the years, with the company experiencing both improvements and deteriorations in its working capital management efficiency. Management should continue to monitor and optimize the cash conversion cycle to ensure operational efficiency and sustained financial performance.