Dream Finders Homes Inc (DFH)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 309.64 | 266.26 | 194.17 | 182.26 | 151.70 | 149.22 | 150.09 | 147.35 | 157.57 | 198.08 | 209.03 | 218.45 | 241.77 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 309.64 | 266.26 | 194.17 | 182.26 | 151.70 | 149.22 | 150.09 | 147.35 | 157.57 | 198.08 | 209.03 | 218.45 | 241.77 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 309.64 + — – —
= 309.64
The cash conversion cycle of Dream Finders Homes Inc, as depicted from the provided data, has shown fluctuations over the analyzed period. The cash conversion cycle, which represents the time it takes for a company to convert its investments in inventory back into cash, has varied from a peak of 309.64 days on December 31, 2024, to a low of 147.35 days on March 31, 2023.
The decreasing trend in the cash conversion cycle from December 2022 to March 2023 indicates that the company is managing its cash flows more efficiently, possibly through improved inventory management or quicker conversion of sales into cash. This efficiency continued till June 2023, with the cycle hitting a low of 147.35 days.
However, from September 2023 onwards, the cash conversion cycle started to increase, reaching 309.64 days by the end of December 2024. This upward trend might suggest challenges in managing inventory levels, collection of accounts receivable, or payment of accounts payable. A longer cash conversion cycle could signify potential issues with liquidity and working capital management.
Overall, a thorough analysis of the reasons behind these fluctuations in the cash conversion cycle could provide insights into the company's operational efficiency, profitability, and cash flow management strategies, which are crucial for sustainable business growth in the long run.
Peer comparison
Dec 31, 2024