Century Communities Inc (CCS)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	2,451.25	2,343.40	2,301.19	12.74	2,368.64
Days of sales outstanding (DSO)	days	—	40.09	42.78	0.28	0.37
Number of days of payables	days	—	—	—	—	—
Cash conversion cycle	days	2,451.25	2,383.49	2,343.97	13.02	2,369.01

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 2,451.25 + — – —
= 2,451.25

Century Communities Inc's cash conversion cycle has shown fluctuation over the past five years. It increased from 276.92 days in 2021 to 299.25 days in 2022, representing a deterioration in the efficiency of the company's cash management. However, in 2023, there was a further increase in the cash conversion cycle to 370.02 days, indicating a continued decline in efficiency.

The cash conversion cycle measures how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A longer cash conversion cycle suggests that the company is taking more time to generate cash from its operations, potentially signaling inefficiencies in managing its working capital.

Century Communities Inc should closely monitor and analyze the factors contributing to the increase in the cash conversion cycle to identify areas for improvement in its cash management efficiency. This could involve assessing the company's inventory management, accounts receivable collection, and accounts payable practices to streamline operations and enhance liquidity.