AutoNation Inc (AN)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 55.50 | 59.29 | 59.15 | 49.57 | 50.61 | 44.54 | 43.80 | 37.48 | 34.42 | 31.33 | 32.62 | 28.88 | 32.29 | 26.74 | 32.45 | 46.13 | 56.38 | 54.33 | 52.79 | 76.54 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 55.50 | 59.29 | 59.15 | 49.57 | 50.61 | 44.54 | 43.80 | 37.48 | 34.42 | 31.33 | 32.62 | 28.88 | 32.29 | 26.74 | 32.45 | 46.13 | 56.38 | 54.33 | 52.79 | 76.54 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 55.50 + — – —
= 55.50
The cash conversion cycle of AutoNation Inc has shown fluctuations over the period from March 31, 2020, to December 31, 2024. The cash conversion cycle indicates the time it takes for a company to convert its investment in inventory and other resources into cash flows from sales.
The trend in the cash conversion cycle for AutoNation Inc shows a general improvement from higher values to lower values, indicating a more efficient management of cash flows and working capital over time. The cycle decreased from 76.54 days as of March 31, 2020, to a low of 26.74 days as of September 30, 2021, before slightly increasing to 59.15 days as of June 30, 2024.
A lower cash conversion cycle is usually favorable as it signifies that the company is able to generate cash quickly from its operational activities. It suggests efficient inventory management, faster collection of accounts receivable, and longer payment terms with suppliers.
However, the slight increase observed towards the end of the period may indicate potential issues arising in working capital management or changes in the company's operating environment. It is important for AutoNation Inc to monitor and analyze its cash conversion cycle regularly to ensure continued efficiency in its working capital management.
Peer comparison
Dec 31, 2024