Chuy's Holdings Inc (CHUY)

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	2.19	2.68	2.42	2.29	1.97
Days of sales outstanding (DSO)	days	1.52	1.73	1.67	1.94	1.43
Number of days of payables	days	6.76	10.46	5.95	4.71	5.05
Cash conversion cycle	days	-3.04	-6.04	-1.87	-0.48	-1.65

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 2.19 + 1.52 – 6.76
= -3.04

Chuy's Holdings Inc has shown a mixed trend in its cash conversion cycle over the past five years. The company's cash conversion cycle measures how long it takes for the company to convert its investments in inventory and other resources into cash from sales.

In 2023, Chuy's Holdings Inc had a negative cash conversion cycle of -10.31 days, indicating that the company was able to convert its investments into cash at a relatively fast pace. This represents an improvement from the previous year when the cash conversion cycle was -17.30 days, suggesting enhanced efficiency in managing inventory and receivables.

Comparing to 2021 and 2020, both years had negative cash conversion cycles of -6.61 days and -4.24 days, respectively. These figures indicate that the company continued to perform well in terms of managing its working capital and converting it into cash. However, there was a slight increase in the cash conversion cycle in 2021 compared to 2020.

In 2019, the cash conversion cycle was -7.38 days, also showing efficient working capital management by the company.

Overall, Chuy's Holdings Inc has generally exhibited a strong performance in its cash conversion cycle over the past five years, with the cycle consistently being negative. This signifies that the company has been effective in managing its working capital and converting it into cash quickly, which is a positive indicator of its operational efficiency and financial health.