Gibraltar Industries Inc (ROCK)
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 | 43.30 | 58.04 | 61.27 | 46.23 | 33.34 |
| Days of sales outstanding (DSO) | days | 59.49 | 57.02 | 64.42 | 69.99 | 59.94 |
| Number of days of payables | days | 33.10 | 36.31 | 59.90 | 63.36 | 39.08 |
| Cash conversion cycle | days | 69.69 | 78.75 | 65.78 | 52.86 | 54.20 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 43.30 + 59.49 – 33.10
= 69.69
The cash conversion cycle of Gibraltar Industries Inc. has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle decreased to 69.69 days from 78.75 days in 2022. This suggests an improvement in the company's ability to convert its inventory and accounts receivable into cash.
Comparing to previous years, the cash conversion cycle was lower in 2020 and 2019, indicating that the company was managing its working capital more efficiently during those periods. The increase in the cash conversion cycle in 2021 and 2022 could have been due to factors such as slower collections from customers or increased inventory holding periods.
Overall, a decreasing trend in the cash conversion cycle is generally considered positive as it indicates that the company is managing its working capital effectively and turning its assets into cash more efficiently. However, it is essential to continue monitoring this metric to ensure that the company maintains a healthy balance between liquidity and operational efficiency.
Peer comparison
Dec 31, 2023