Gogo Inc (GOGO)
Cash conversion cycle
| 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 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 253.62 | 263.38 | 248.12 | 221.25 | 205.07 | 190.12 | 173.12 | 156.23 | 152.73 | 71.00 | 55.57 | 52.40 | 36.52 | 57.14 | 219.51 | 197.09 | 73.20 | 264.43 | 285.65 | 277.88 |
| Days of sales outstanding (DSO) | days | 45.31 | 43.92 | 44.30 | 41.40 | 51.16 | 50.13 | 48.52 | 49.89 | 52.70 | 59.35 | 66.62 | 60.53 | 44.76 | 25.32 | 43.34 | 51.39 | 54.54 | 55.60 | 60.26 | 58.87 |
| Number of days of payables | days | 64.60 | 64.29 | 71.44 | 58.81 | 56.54 | 75.13 | 84.08 | 77.63 | 77.33 | 33.11 | 29.84 | 20.77 | 14.30 | 9.86 | 69.88 | 57.59 | 11.43 | 50.58 | 55.83 | 52.54 |
| Cash conversion cycle | days | 234.34 | 243.00 | 220.99 | 203.83 | 199.69 | 165.12 | 137.56 | 128.50 | 128.10 | 97.24 | 92.35 | 92.16 | 66.97 | 72.60 | 192.98 | 190.89 | 116.32 | 269.45 | 290.08 | 284.20 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 253.62 + 45.31 – 64.60
= 234.34
The cash conversion cycle of Gogo Inc has shown fluctuations over the past eight quarters. In Q4 2023, the cash conversion cycle increased to 190.35 days, indicating that it took longer for the company to convert its investments in inventory and other resources into cash from sales. This was a significant increase compared to the previous quarter, Q3 2023, where the cycle was 184.67 days.
Looking back over the past two years, there have been fluctuations in the cash conversion cycle, with some quarters showing longer cycles than others. Q2 and Q3 of 2022 had relatively higher cycles compared to Q1 and Q4 of the same year.
Overall, a shorter cash conversion cycle is generally seen as positive, as it means the company is able to convert its investments into cash more quickly. A longer cycle can indicate inefficiencies in inventory management, collection of receivables, or payment of payables. Therefore, Gogo Inc should focus on optimizing its working capital management to improve its cash conversion cycle efficiency.
Peer comparison
Dec 31, 2023