Gates Industrial Corporation plc (GTES)
Cash conversion cycle
| 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 | Dec 31, 2019 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 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 | 89.18 | 94.45 |
| Days of sales outstanding (DSO) | days | 90.34 | 86.93 | 81.65 | 88.40 | 93.04 | — | 84.37 | — | — | — | 76.40 | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | 76.13 | 75.88 | 75.55 | 70.96 | 75.00 | — | 74.41 | — | — | — | 86.60 | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 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 | 89.18 | 94.45 |
June 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 120.15 + 90.34 – 76.13
= 134.37
The cash conversion cycle of Gates Industrial Corporation plc has shown some fluctuations over the past few quarters. The company's cash conversion cycle was at its highest at 134.37 days in June 2024 and has seen some variability since then. In general, a longer cash conversion cycle indicates that the company takes more time to convert its investments in inventory and other resources into cash from sales.
Despite the fluctuations, the company has managed to keep its cash conversion cycle within a reasonable range. The decreasing trend in the cash conversion cycle from the peak in June 2024 to the current 124.88 days in March 2024 suggests an improvement in the efficiency of the company's working capital management. This improvement could be attributed to better inventory management, faster collection of receivables, or extended payment terms to suppliers.
It is worth noting that the cash conversion cycle is an important metric for evaluating the efficiency of a company's operations and financial health. A shorter cash conversion cycle generally indicates a more efficient use of resources and better liquidity management. Therefore, maintaining a relatively low and stable cash conversion cycle over time is essential for sustaining the financial health and profitability of Gates Industrial Corporation plc.
Peer comparison
Jun 30, 2024