Hilton Grand Vacations Inc (HGV)
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 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 997.64 | 1,521.74 | 1,359.24 | 1,341.80 | 1,158.73 | 1,815.29 | 1,650.88 | 1,506.35 | 1,149.55 | 739.69 | 831.13 | 941.56 | — | 1,177.19 | 674.56 | 704.56 | — | 2,115.19 | 1,982.37 | 1,856.47 |
| Days of sales outstanding (DSO) | days | 23.08 | 30.96 | 43.19 | 44.76 | 46.52 | 40.74 | 43.72 | 46.01 | 48.63 | 39.46 | 43.16 | 56.67 | 47.21 | 59.37 | 81.19 | 52.08 | 48.59 | 34.60 | 96.95 | 33.16 |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 1,020.72 | 1,552.70 | 1,402.43 | 1,386.56 | 1,205.25 | 1,856.03 | 1,694.60 | 1,552.36 | 1,198.19 | 779.16 | 874.28 | 998.23 | 47.21 | 1,236.56 | 755.75 | 756.63 | 48.59 | 2,149.78 | 2,079.32 | 1,889.63 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 997.64 + 23.08 – —
= 1,020.72
The cash conversion cycle tracks the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. In the case of Hilton Grand Vacations Inc, the cash conversion cycle has shown significant fluctuations over the period analyzed.
At the end of December 2020 and December 2021, Hilton Grand Vacations Inc experienced extremely low cash conversion cycles of 48.59 days and 47.21 days, respectively. This indicates that the company was able to efficiently manage its cash flows during these periods, potentially through effective inventory management and quick payment collections.
However, there was a noticeable increase in the cash conversion cycle during the first half of 2022, reaching 998.23 days by March 31 and peaking at 1,694.60 days by June 30. This significant increase suggests potential challenges in managing cash flows efficiently, possibly due to delays in receiving payments or increased inventory levels.
The cash conversion cycle improved slightly in the second half of 2022, with a decrease to 1,205.25 days by December 31. However, the cycle remained relatively high throughout 2023 and 2024, fluctuating between 1,200 to 1,700 days, indicating ongoing challenges in optimizing the company's working capital management.
Overall, the data highlights the importance for Hilton Grand Vacations Inc to focus on implementing strategies to shorten its cash conversion cycle, such as improving inventory turnover, extending payment terms with suppliers, and enhancing collection processes, in order to enhance its cash flow efficiency and overall financial performance.