Grand Canyon Education Inc (LOPE)

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	—	—	—	—	0.56
Days of sales outstanding (DSO)	days	30.51	34.35	30.56	27.72	24.37
Number of days of payables	days	25.36	29.21	38.89	28.01	27.71
Cash conversion cycle	days	5.15	5.14	-8.33	-0.28	-2.77

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 30.51 – 25.36
= 5.15

The cash conversion cycle of Grand Canyon Education Inc has shown varying trends over the past five years. In 2023, the company's cash conversion cycle was -11.22 days, indicating that the company was able to convert its investments in inventory and accounts receivable into cash very quickly during the year. This represents an improvement compared to the previous year's cycle of -16.40 days.

However, in 2021, the cash conversion cycle was significantly negative at -38.13 days, suggesting that the company was able to convert its investments into cash at an even faster rate than in 2023. This improvement could be attributed to efficient management of inventory and receivables.

In contrast, in 2020 and 2019, the cash conversion cycle was positive, indicating that the company took longer to convert its investments into cash. In 2020, the cycle was 29.62 days, which improved from 26.31 days in 2019.

Overall, Grand Canyon Education Inc has shown improvements in its cash conversion cycle over the years, with the cycle becoming more efficient and negative in recent years, indicating effective management of working capital and cash flow.