Century Communities Inc (CCS)
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 | 2,400.37 | 2,451.25 | 2,343.40 | 2,301.19 | 12.74 |
| Days of sales outstanding (DSO) | days | — | — | 40.09 | 42.78 | 0.28 |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 2,400.37 | 2,451.25 | 2,383.49 | 2,343.97 | 13.02 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 2,400.37 + — – —
= 2,400.37
The cash conversion cycle of Century Communities Inc has shown a significant increase over the years. For the December 31, 2020, the company had a relatively low cash conversion cycle of 13.02 days, indicating efficient management of its working capital. However, by December 31, 2021, the cash conversion cycle skyrocketed to 2,343.97 days, which points towards potential issues in managing its cash flow and liquidity.
Subsequently, over the following years, the cash conversion cycle remained high at 2,383.49 days in 2022, 2,451.25 days in 2023, and 2,400.37 days in 2024. Such prolonged cash conversion cycles suggest that Century Communities Inc takes a considerable amount of time to convert its investments in inventory into cash from sales, potentially leading to increased working capital requirements and liquidity challenges.
In conclusion, the rising trend in the cash conversion cycle for Century Communities Inc signifies the need for the company to assess and improve its working capital management processes to enhance cash flow efficiency and maintain financial stability in the long run.
Peer comparison
Dec 31, 2024