AutoNation Inc (AN)

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	50.75	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	67.74	67.56	72.78	77.64
Days of sales outstanding (DSO)	days	14.09	11.91	11.54	10.18	11.62	8.82	9.69	10.23	10.31	9.15	11.73	14.91	15.13	12.36	12.16	8.91	15.68	14.28	13.52	13.52
Number of days of payables	days	5.77	5.75	6.65	5.92	5.51	5.82	6.36	6.56	6.92	6.33	7.32	8.45	7.27	7.54	5.67	4.69	5.95	5.51	5.48	5.54
Cash conversion cycle	days	59.07	50.70	48.69	41.74	40.53	34.34	35.95	32.55	35.68	29.56	36.86	52.58	64.23	59.15	59.27	80.76	77.47	76.34	80.81	85.61

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 50.75 + 14.09 – 5.77
= 59.07

Autonation Inc.'s cash conversion cycle has shown some fluctuations over the past eight quarters. The cycle measures the time it takes for the company to convert its investments in inventory and other resources into cash inflows from sales.

In Q4 2023, the cash conversion cycle increased to 59.07 days, reflecting a slower conversion rate compared to the previous quarter. This could indicate potentially longer periods for Autonation Inc. to sell its products and collect cash from customers.

Prior to Q4 2023, the company experienced a decreasing trend from Q1 2022 to Q3 2023, indicating an improvement in efficiency in managing its inventory and accounts receivable. The cycle ranged between 34.34 days to 50.70 days during this period.

It's worth noting that the cash conversion cycle in Q4 2022 was lower than in Q3 2023, suggesting that Autonation Inc. was able to manage its working capital more effectively in the previous year.

Overall, fluctuations in the cash conversion cycle should be further analyzed to understand the underlying reasons for the changes and to assess the company's effectiveness in managing its cash flow and working capital.