Gates Industrial Corporation plc (GTES)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 120.38 | 127.08 | 120.15 | 113.84 | 106.83 | 103.93 | 102.68 | 105.16 | 103.97 | 111.40 | 114.35 | 119.83 | 116.69 | 113.15 | 106.59 | 106.34 | 105.50 | 102.61 | 103.10 | 92.99 |
| Days of sales outstanding (DSO) | days | 80.46 | 92.78 | 90.34 | 86.93 | 81.65 | 88.40 | 93.04 | — | 84.37 | — | — | — | 76.40 | — | — | — | — | — | — | — |
| Number of days of payables | days | 72.69 | 74.97 | 76.13 | 75.88 | 75.55 | 70.96 | 75.00 | — | 74.41 | — | — | — | 86.60 | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 128.15 | 144.89 | 134.37 | 124.88 | 112.92 | 121.37 | 120.72 | 105.16 | 113.94 | 111.40 | 114.35 | 119.83 | 106.48 | 113.15 | 106.59 | 106.34 | 105.50 | 102.61 | 103.10 | 92.99 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 120.38 + 80.46 – 72.69
= 128.15
The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. Analyzing the data provided for Gates Industrial Corporation plc, we observe fluctuations in the cash conversion cycle over the reported periods.
The cash conversion cycle for Gates Industrial Corporation plc has shown varying trends over the past years. It started at 92.99 days on March 31, 2020, increased to 134.37 days on June 30, 2024, and decreased to 128.15 days by December 31, 2024. This indicates potential inefficiencies in managing the company's cash flow and working capital during certain periods.
The company experienced a notable peak in the cash conversion cycle, reaching 144.89 days on September 30, 2024. This prolonged cycle may suggest challenges in optimizing inventory levels, efficient collection from customers, or managing payable periods.
It is critical for Gates Industrial Corporation plc to closely monitor and manage its cash conversion cycle to ensure effective utilization of resources, timely collection of receivables, and efficient management of inventory levels. A lower cash conversion cycle is generally preferable as it indicates quicker cash generation from operating activities, which can improve overall liquidity and financial performance. Periodic assessment and improvement of working capital management practices may help in reducing the cash conversion cycle and enhancing the company's financial health.
Peer comparison
Dec 31, 2024