Six Flags Entertainment Corporation (FUN)
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 | 13.66 | 100.66 | 104.22 | 619.12 | 95.11 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 13.66 | 100.66 | 104.22 | 619.12 | 95.11 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 13.66 + — – —
= 13.66
The cash conversion cycle of Six Flags Entertainment Corporation has shown significant fluctuations over the past five years. In 2023, the company's cash conversion cycle improved to 13.66 days, indicating that it took approximately 13.66 days for the company to convert its investments in inventory and other resources into cash flows from sales. This is a notable improvement from the previous year's figure of 100.66 days.
The significant decrease in the cash conversion cycle in 2023 may suggest that Six Flags Entertainment Corporation has effectively managed its working capital, streamlined its operations, or improved its inventory turnover rate. This shorter cash conversion cycle reflects a more efficient use of resources and a quicker turnaround in converting investments into cash receipts.
Comparing to the years before, in 2020, the company faced an exceptionally extended cash conversion cycle of 619.12 days, which could indicate inefficiencies in managing working capital, slow inventory turnover, or challenges in converting sales into cash. The subsequent improvements in 2021 and 2022, followed by the significant improvement in 2023, suggest that Six Flags Entertainment Corporation has made strides in optimizing its cash flow cycle.
Overall, the trend in the company's cash conversion cycle reflects its ability to manage working capital effectively, improve operational efficiency, and enhance liquidity. It is essential for management and investors to continue monitoring this metric to ensure sustained efficiency and financial performance over time.
Peer comparison
Dec 31, 2023