Amazon.com Inc (AMZN)
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 | 30.63 | 31.36 | 33.75 | 34.93 | 30.81 |
| Days of sales outstanding (DSO) | days | 31.75 | 33.36 | 30.24 | 25.65 | 23.30 |
| Number of days of payables | days | 84.48 | 79.98 | 78.08 | 84.19 | 93.93 |
| Cash conversion cycle | days | -22.10 | -15.26 | -14.09 | -23.60 | -39.81 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 30.63 + 31.75 – 84.48
= -22.10
The cash conversion cycle (CCC) of Amazon.com Inc has shown a consistent improvement over the years. As of December 31, 2020, the CCC was -39.81 days, indicating that Amazon was able to convert its inventory and receivables into cash within approximately 40 days. By December 31, 2024, the CCC decreased further to -22.10 days, demonstrating the company's efficiency in managing its working capital.
A negative CCC implies that Amazon is able to collect cash from its sales before paying its suppliers, resulting in a favorable cash flow position. The decreasing trend in the CCC indicates that Amazon has been optimizing its inventory management, improving its receivables collection processes, and managing its payables effectively.
Overall, the consistent improvement in the cash conversion cycle reflects Amazon's ability to efficiently turn its resources into cash, contributing to its strong financial performance and liquidity position.
Peer comparison
Dec 31, 2024