WW Grainger Inc (GWW)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 80.85 | 82.86 | 87.68 | 82.22 | 83.68 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 80.85 | 82.86 | 87.68 | 82.22 | 83.68 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 80.85 + — – —
= 80.85
The cash conversion cycle of WW Grainger Inc, a key metric that measures the efficiency of the company's working capital management, has shown some fluctuations over the past five years.
As of December 31, 2020, the cash conversion cycle stood at 83.68 days, indicating that on average it took the company around 83.68 days to convert its investments in inventory into cash. Over the following years, we observed some variability in this metric. By the end of December 31, 2021, the cycle decreased slightly to 82.22 days before rising to 87.68 days by December 31, 2022. However, in the subsequent years, there was a positive trend with the cycle decreasing to 82.86 days by December 31, 2023, and further dropping to 80.85 days by December 31, 2024.
Overall, the decreasing trend in the cash conversion cycle from 2022 to 2024 suggests that WW Grainger Inc improved its efficiency in managing working capital and converting inventory into cash more promptly. This can be a positive sign of effective inventory management and collection practices, potentially leading to improved cash flows and overall financial performance.