Allegiant Travel Company (ALGT)
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 | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 10.29 | 16.90 | 13.39 | 70.86 | 5.06 |
| Number of days of payables | days | 18.86 | 24.05 | 13.10 | 10.99 | 9.07 |
| Cash conversion cycle | days | -8.58 | -7.15 | 0.29 | 59.87 | -4.01 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 10.29 – 18.86
= -8.58
Allegiant Travel's cash conversion cycle has shown fluctuation over the past five years. In 2023, the company's cash conversion cycle decreased to 10.29 days, reflecting a shorter time taken to convert its resources into cash. This improvement may indicate more efficient management of inventory, accounts receivable, and accounts payable.
In 2022, the cash conversion cycle increased to 16.90 days, suggesting a longer period to convert resources into cash compared to the previous year. However, in 2021, the cycle decreased to 13.39 days, indicating improved efficiency in managing cash flow.
The most notable variation occurred in 2020 when the cash conversion cycle spiked to 70.86 days, reflecting significant challenges in converting resources into cash within a reasonable timeframe. This could indicate issues with inventory management or delayed collections from customers.
In 2019, Allegiant Travel achieved a notably low cash conversion cycle of 5.06 days, indicating a swift conversion of resources into cash. This efficiency might have been driven by effective working capital management practices.
Overall, monitoring the cash conversion cycle trends can provide insights into Allegiant Travel's operational efficiency and effectiveness in managing working capital, inventory levels, and accounts receivable and payable.
Peer comparison
Dec 31, 2023