Penske Automotive Group Inc (PAG)
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 | 66.37 | 69.90 | 68.54 | 65.15 | 63.62 | 55.49 | 59.41 | 56.82 | 55.75 | 51.59 | 51.01 | 51.77 | 54.09 | 45.36 | 52.05 | 66.88 | 72.44 | 67.48 | 71.69 | 80.90 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 66.37 | 69.90 | 68.54 | 65.15 | 63.62 | 55.49 | 59.41 | 56.82 | 55.75 | 51.59 | 51.01 | 51.77 | 54.09 | 45.36 | 52.05 | 66.88 | 72.44 | 67.48 | 71.69 | 80.90 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 66.37 + — – —
= 66.37
The cash conversion cycle of Penske Automotive Group Inc has shown fluctuations over the period from March 31, 2020, to December 31, 2024. The cash conversion cycle, which measures the time it takes for a company to convert its investment in inventory into cash flows from sales, decreased from 80.90 days on March 31, 2020, to 45.36 days on September 30, 2021, indicating efficient management of inventory and collections.
However, from December 31, 2021, to December 31, 2024, the cash conversion cycle increased gradually, reaching its peak at 69.90 days on September 30, 2024. This upward trend suggests a longer period of time taken to convert inventory into cash during this period. It is important to note that a longer cash conversion cycle can tie up capital and impact liquidity.
Overall, Penske Automotive Group Inc should continue to monitor and manage its cash conversion cycle effectively to ensure optimal use of its resources and maintain healthy cash flows. Additional analysis of the underlying reasons for the fluctuations in the cash conversion cycle could provide insights into areas for improvement in working capital management.
Peer comparison
Dec 31, 2024