Churchill Downs Incorporated (CHDN)
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 | 66.00 | 81.90 | 86.06 | 86.87 | 74.55 |
| Days of sales outstanding (DSO) | days | 19.89 | 19.26 | 24.75 | 29.75 | 14.22 |
| Number of days of payables | days | 135.33 | 159.10 | 109.22 | 114.59 | 93.06 |
| Cash conversion cycle | days | -49.44 | -57.94 | 1.59 | 2.03 | -4.30 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 66.00 + 19.89 – 135.33
= -49.44
Churchill Downs, Inc.'s cash conversion cycle has exhibited mixed trends over the past five years. The company's cash conversion cycle improved significantly in 2023 compared to 2022, decreasing from -40.42 days to -29.87 days. This indicates that the company was able to convert its investments in raw materials and other inputs into cash more efficiently during 2023.
In comparison to 2021, the cash conversion cycle in 2023 increased, moving from -16.19 days to -29.87 days, showcasing a deterioration in efficiency in converting resources into cash during the year. However, the company's cash conversion cycle in 2023 was still better than that of 2020, where it stood at -16.40 days.
Overall, Churchill Downs, Inc. has demonstrated a generally negative cash conversion cycle in recent years, indicating that the company is efficient in managing its working capital and effectively converting its assets into cash. However, fluctuations in the cash conversion cycle over the years suggest potential changes in the company's operational efficiency and effectiveness in managing its working capital.