Delta Air Lines Inc (DAL)
Cash conversion cycle
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 15.79 | 14.52 | 17.32 | 16.97 | 16.77 | 18.31 | 20.66 | 27.12 | 22.91 | 13.52 | 13.40 | 11.29 | 7.75 | 6.01 | 5.04 | 5.38 | 6.36 | 10.37 | 7.42 | 7.72 |
| Days of sales outstanding (DSO) | days | 23.51 | 19.99 | 20.82 | 20.81 | 22.24 | 23.44 | 24.89 | 27.96 | 32.97 | 30.91 | 34.88 | 48.61 | 58.60 | 31.52 | 22.86 | 14.89 | 18.53 | 22.27 | 22.46 | 22.79 |
| Number of days of payables | days | 49.38 | 49.13 | 61.15 | 60.37 | 57.81 | 65.66 | 69.55 | 83.73 | 85.28 | 82.60 | 83.98 | 69.20 | 58.20 | 45.29 | 34.32 | 35.55 | 48.35 | 46.41 | 45.34 | 43.97 |
| Cash conversion cycle | days | -10.08 | -14.62 | -23.01 | -22.58 | -18.80 | -23.91 | -23.99 | -28.64 | -29.41 | -38.17 | -35.69 | -9.30 | 8.15 | -7.76 | -6.42 | -15.28 | -23.46 | -13.77 | -15.46 | -13.45 |
March 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 15.79 + 23.51 – 49.38
= -10.08
The cash conversion cycle of Delta Air Lines Inc fluctuated over the period shown in the table, ranging from -38.17 days to 8.15 days. The negative values indicate that Delta's operating cycle, which includes the time it takes for the company to convert raw materials into cash through sales, is shorter than its cash conversion process, reflecting efficient working capital management.
In general, a shorter cash conversion cycle is desirable as it signifies that the company can generate cash more quickly from its operations and requires less working capital to fund its day-to-day activities. Delta's cash conversion cycle improved significantly in the first quarter of 2021, reaching a positive value of 8.15 days, possibly due to improved inventory management or faster collection of receivables.
However, the company experienced a negative cash conversion cycle in subsequent quarters, indicating that it was able to convert cash back into inventory or raw materials quicker than it took to convert those materials into sales. This could suggest efficient cash utilization but could also be a result of aggressive inventory management practices.
Overall, Delta Air Lines' cash conversion cycle showed variations throughout the periods, implying different working capital management strategies or operational efficiencies. Further analysis and comparison with industry benchmarks could provide additional insights into the company's financial performance and liquidity management.
Peer comparison
Mar 31, 2024