American Airlines Group (AAL)

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	25.05	23.83	25.30	28.65	24.24
Days of sales outstanding (DSO)	days	14.69	16.61	19.56	30.45	14.31
Number of days of payables	days	24.56	22.47	24.98	21.23	27.01
Cash conversion cycle	days	15.18	17.97	19.89	37.87	11.55

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 25.05 + 14.69 – 24.56
= 15.18

The cash conversion cycle of American Airlines Group Inc has fluctuated over the past five years, indicating changes in the efficiency of its working capital management.

In 2023, the cash conversion cycle decreased to 14.01 days from 15.94 days in 2022. This suggests that the company was able to convert its investments in inventory and accounts receivable into cash more quickly during that year.

Comparing to 2021 where the cash conversion cycle was at 18.38 days, the decrease indicates an improvement in the company's ability to generate cash from its operating activities within a shorter timeframe.

In contrast, the cash conversion cycle was substantially higher in 2020 at 28.25 days, reflecting a period of slower cash generation possibly due to operational inefficiencies or challenges in converting inventory and receivables into cash promptly.

The lowest cash conversion cycle was observed in 2019 at 13.96 days, indicating a high efficiency in managing working capital and promptly converting sales into cash.

Overall, fluctuations in the cash conversion cycle of American Airlines Group Inc over the past five years suggest varying levels of efficiency in managing its working capital and converting assets into cash, with improvements seen in some years and challenges in others.