Allegiant Travel Company (ALGT)

Cash conversion cycle

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	—	—	—	13.89	—	14.24	12.12	11.41	—	9.52	10.92	9.92	—	7.95	7.62	8.22	—	8.75	8.13	6.43
Days of sales outstanding (DSO)	days	10.29	6.39	6.87	8.61	16.90	13.21	14.93	17.23	13.39	36.91	53.39	79.84	70.86	50.58	52.86	38.58	5.06	6.41	7.54	7.37
Number of days of payables	days	18.86	20.51	24.45	26.10	24.05	18.74	21.65	18.70	13.10	11.85	20.66	14.26	10.93	19.55	15.11	17.89	8.89	6.91	10.38	9.45
Cash conversion cycle	days	-8.58	-14.12	-17.58	-3.61	-7.15	8.72	5.39	9.95	0.29	34.58	43.64	75.50	59.94	38.98	45.37	28.91	-3.83	8.24	5.28	4.36

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 10.29 – 18.86
= -8.58

The cash conversion cycle (CCC) of Allegiant Travel has shown variability over the past eight quarters, ranging from 6.39 days to 17.23 days. The CCC measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

In Q4 2023, Allegiant Travel's CCC was 10.29 days, reflecting the time it takes for the company to sell its inventory, collect receivables, and pay suppliers. This represents an increase from the previous quarter Q3 2023, where the CCC was 6.39 days, indicating a longer cycle.

Comparing Q4 2023 to the same quarter in the prior year, Q4 2022, there was an improvement in the cash conversion cycle from 16.90 days to 10.29 days, suggesting better efficiency in managing working capital and generating cash from operations.

Overall, Allegiant Travel has demonstrated some fluctuations in its cash conversion cycle, with efforts needed to optimize working capital management, streamline operational processes, and enhance cash flow efficiency to maintain a healthy financial position in the long term.