Alaska Air Group Inc (ALK)

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	5.35	5.58	4.75	4.54	4.76	4.65	5.19	5.02	4.21	4.78	4.06	4.79	4.33	3.75	3.52	3.82	4.10	3.89	3.33	3.45
Days of sales outstanding (DSO)	days	13.41	12.02	12.38	12.21	11.20	13.87	17.83	33.83	31.93	38.68	53.99	69.20	49.13	23.50	15.31	11.92	13.43	15.97	16.82	15.73
Number of days of payables	days	9.55	10.47	9.40	8.90	10.11	10.00	15.97	19.23	13.57	13.94	12.40	11.17	8.21	6.12	6.41	6.68	8.32	7.41	9.44	9.34
Cash conversion cycle	days	9.21	7.12	7.73	7.84	5.85	8.52	7.06	19.61	22.57	29.51	45.65	62.82	45.25	21.13	12.42	9.06	9.21	12.45	10.71	9.84

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 5.35 + 13.41 – 9.55
= 9.21

The cash conversion cycle for Alaska Air Group Inc. demonstrates variations over the quarters in the timeframe provided. In Q4 2023, the cash conversion cycle was 13.41 days, which was slightly higher than in the previous quarter at 12.02 days. Despite this increase, the company's efficiency in managing cash flow improved compared to the same period in the previous year (Q4 2022), where the cycle was 11.20 days.

Throughout 2023, Alaska Air Group Inc. maintained a relatively stable cash conversion cycle, with fluctuations ranging from 12.02 days to 13.41 days. This consistency indicates that the company has been effective in managing its operating cycle efficiency during the year.

It is noteworthy that the cash conversion cycle significantly increased in Q2 2022 to 17.87 days and reached its peak in Q1 2022 at 34.02 days. These fluctuations might suggest challenges or inefficiencies in managing working capital and cash flow during these periods.

Overall, Alaska Air Group Inc.'s performance in managing its cash conversion cycle has shown improvement and stability in recent quarters, indicating effective management of operating efficiency and working capital. However, analysis and monitoring of the trend in the cash conversion cycle over time are essential to assess the company's ongoing financial health and operational efficiency.