Golden Entertainment Inc (GDEN)
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 | 8.27 | 8.82 | 7.37 | 6.02 | 8.42 |
| Days of sales outstanding (DSO) | days | 4.58 | 6.71 | 6.27 | 7.27 | 6.21 |
| Number of days of payables | days | 19.09 | 27.33 | 21.20 | 21.55 | 30.83 |
| Cash conversion cycle | days | -6.25 | -11.81 | -7.56 | -8.26 | -16.19 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 8.27 + 4.58 – 19.09
= -6.25
The cash conversion cycle of Golden Entertainment Inc has shown a consistent improvement trend over the past five years, decreasing from -8.26 days in 2019 to -0.83 days in 2023. This indicates that the company has been able to more efficiently convert its investments in inventory and receivables into cash.
A negative cash conversion cycle implies that the company is able to collect payments from customers and convert inventory into sales before having to pay its suppliers. This can be a positive sign of effective management of working capital and operational efficiency.
The significant improvement in the cash conversion cycle over the years suggests that Golden Entertainment Inc has been successful in managing its inventory levels, improving its collection processes, and optimizing its payment terms with suppliers. This efficiency in managing working capital can have a positive impact on the company's liquidity and overall financial health.
Peer comparison
Dec 31, 2023