American Airlines Group (AAL)

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	26.86	26.20	26.05	25.76	25.05	25.76	23.81	23.52	23.83	24.08	26.66	26.01	25.30	29.51	30.78	32.00	28.58	36.67	32.78	30.07
Days of sales outstanding (DSO)	days	13.65	12.70	14.62	14.88	14.69	14.54	14.91	14.47	16.61	16.78	17.25	17.06	19.56	21.00	26.07	29.87	29.71	17.43	9.85	8.68
Number of days of payables	days	24.99	26.62	30.52	30.16	24.56	22.22	25.12	25.01	22.47	23.01	32.05	33.08	24.98	29.26	37.37	31.34	21.18	24.19	23.30	27.97
Cash conversion cycle	days	15.51	12.29	10.16	10.48	15.18	18.08	13.60	12.97	17.97	17.85	11.85	10.00	19.89	21.26	19.48	30.53	37.11	29.91	19.33	10.79

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 26.86 + 13.65 – 24.99
= 15.51

The cash conversion cycle of American Airlines Group, which represents the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales, has exhibited fluctuating trends over the reported periods.

From March 31, 2020, to June 30, 2020, there was a significant increase in the cash conversion cycle from 10.79 days to 19.33 days, indicating a longer period required to convert investments into cash. This trend continued until December 31, 2020, where the cycle peaked at 37.11 days, reflecting potential liquidity challenges or inefficiencies in working capital management.

Subsequently, there was a slight decrease noted in the cycle by March 31, 2021, down to 30.53 days, suggesting some improvement in the company's cash conversion efficiency. The cycle further decreased to 19.48 days by June 30, 2021, showcasing continued efforts to optimize working capital processes.

However, by September 30, 2021, there was a slight increase in the cash conversion cycle to 21.26 days, followed by a reduction to 19.89 days by December 31, 2021. The cycle showed a consistent pattern of fluctuations over the subsequent periods, with varying levels of efficiency in managing cash flows.

By March 31, 2022, the cash conversion cycle reduced to 10.00 days, indicating a more expedited conversion of investments to cash. This trend was maintained until September 30, 2022, where the cycle increased to 17.85 days before slightly rising to 17.97 days by December 31, 2022.

The cycle continued to fluctuate in the following periods but generally remained within a relatively stable range, with values ranging from 10.48 days to 18.08 days up to December 31, 2023. By the end of the reported period on June 30, 2024, the cash conversion cycle was recorded at 10.16 days before a slight increase to 12.29 days on September 30, 2024, and further to 15.51 days by December 31, 2024.

Overall, the cash conversion cycle of American Airlines Group has shown varying levels of efficiency in managing working capital and converting investments into cash flows, with some periods indicating potential challenges while others suggesting improvements in cash conversion processes.