Airbnb Inc (ABNB)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021
Days of inventory on hand (DOH)	days	—	1,146.87	—	4.66
Days of sales outstanding (DSO)	days	4.83	7.55	7.05	7.31
Number of days of payables	days	27.60	30.22	33.36	37.26
Cash conversion cycle	days	-22.77	1,124.19	-26.31	-25.29

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 4.83 – 27.60
= -22.77

The cash conversion cycle of Airbnb Inc has shown significant variability over the years based on the provided data.

As of December 31, 2021, the company's cash conversion cycle was recorded at -25.29 days, indicating that Airbnb was able to convert its inventory and receivables into cash more efficiently, operating on a negative cycle which suggests a strong liquidity position.

By December 31, 2022, Airbnb's cash conversion cycle slightly decreased to -26.31 days, reflecting continued efficiency in converting its resources into cash quickly.

However, there was a significant shift in the cash conversion cycle by December 31, 2023, which surged to 1,124.19 days. This sharp increase indicates that Airbnb took a much longer time to convert its inventory and receivables into cash, which could potentially be a red flag for the company in managing its working capital effectively.

By December 31, 2024, the cash conversion cycle improved to -22.77 days, moving back into a negative cycle and suggesting a return to more efficient working capital management compared to the previous year.

Overall, Airbnb Inc's cash conversion cycle has shown fluctuations over the years, with a mix of positive and negative cycles. Analyzing these changes can provide insights into the company's liquidity management and operational efficiency during the respective periods.