Choice Hotels International Inc (CHH)
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 | — | 14.82 | — | — | — |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 0.00 | 14.82 | 0.00 | 0.00 | 0.00 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + — – —
= 0.00
Choice Hotels International Inc's cash conversion cycle for the years 2020, 2021, 2022, 2023, and 2024 were 0.00 days, 0.00 days, 0.00 days, 14.82 days, and 0.00 days, respectively. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
A cash conversion cycle of 0.00 days indicates that the company effectively managed its working capital during those years, efficiently converting its resources into cash. However, in 2023, the cash conversion cycle increased to 14.82 days, suggesting a delay in converting investments into cash during that period.
Overall, a low or zero cash conversion cycle is favorable as it signifies efficient operations and effective management of working capital. The temporary increase in 2023 may require further analysis to understand the underlying reasons and to ensure effective working capital management in the future.
Peer comparison
Dec 31, 2024