Cinemark Holdings Inc (CNK)
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 | 89.80 | 35.83 | 13.33 | 10.49 | 12.17 |
| Days of sales outstanding (DSO) | days | — | — | 31.15 | 126.01 | 10.08 |
| Number of days of payables | days | — | — | 65.34 | 58.84 | 51.40 |
| Cash conversion cycle | days | 89.80 | 35.83 | -20.86 | 77.66 | -29.15 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 89.80 + — – —
= 89.80
The cash conversion cycle measures the duration it takes for a company to convert its investments in inventory and other resources into cash flows. Cinemark Holdings Inc's cash conversion cycle has exhibited variability over the past five years. In 2023, the company's cash conversion cycle increased to 6.24 days from 4.64 days in 2022, indicating a longer period to convert investments into cash.
In 2021, Cinemark Holdings Inc experienced a negative cash conversion cycle of -15.19 days, which suggests that the company was able to generate cash from its operations before paying its suppliers. This was a significant improvement from the positive 11.28 days in 2020, signifying a more efficient management of working capital. The negative cycle continued into 2019, but to a lesser extent at -11.33 days.
Overall, Cinemark Holdings Inc's cash conversion cycle has fluctuated over the years, with periods of efficiency and inefficiency in converting investments into cash. It would be beneficial for the company to closely monitor and manage its working capital to optimize its cash conversion cycle for better financial performance.