Allegiant Travel Company (ALGT)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 13.13 | 10.29 | 16.90 | 13.39 | 70.86 |
| Number of days of payables | days | 14.60 | 18.86 | 24.05 | 13.10 | 10.99 |
| Cash conversion cycle | days | -1.46 | -8.58 | -7.15 | 0.29 | 59.87 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 13.13 – 14.60
= -1.46
The cash conversion cycle of Allegiant Travel Company has shown significant improvement over the years. As of December 31, 2020, the company's cash conversion cycle was 59.87 days, indicating the number of days it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
By December 31, 2021, the cash conversion cycle had decreased dramatically to 0.29 days, suggesting a more efficient management of inventory and receivables. The company further optimized its operations as by December 31, 2022, the cash conversion cycle had turned negative to -7.15 days, indicating that Allegiant Travel Company was able to convert its resources into cash even before paying suppliers or other creditors.
This trend continued positively with the cash conversion cycle further decreasing to -8.58 days by December 31, 2023, and then slightly increasing to -1.46 days by December 31, 2024. Overall, the negative cash conversion cycle values indicate that Allegiant Travel Company is managing its working capital effectively, potentially leading to improved liquidity and cash flow generation.
Peer comparison
Dec 31, 2024