Grand Canyon Education Inc (LOPE)

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	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	0.55	0.59	0.63	0.65
Days of sales outstanding (DSO)	days	30.51	41.97	13.26	41.99	34.35	58.15	19.34	56.77	42.35	40.18	8.88	39.48	27.72	41.86	10.08	36.41	24.37	43.23	8.93	37.33
Number of days of payables	days	25.36	34.18	32.82	31.58	29.21	36.58	36.13	60.71	50.77	64.42	36.41	28.43	28.01	26.45	35.20	34.95	27.38	40.81	38.32	28.75
Cash conversion cycle	days	5.15	7.80	-19.56	10.41	5.14	21.57	-16.79	-3.94	-8.41	-24.24	-27.52	11.05	-0.28	15.41	-25.13	1.46	-2.45	3.01	-28.76	9.23

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 fluctuation over the past eight quarters. In Q1 2023 and Q4 2022, the company had negative cash conversion cycles of -10.46 days and -16.40 days, respectively, indicating efficient management of cash flow and quick conversion of inventory and receivables into cash.

However, in Q3 2022 and Q2 2022, the cash conversion cycles were significantly higher at -22.15 days and -49.29 days, respectively, suggesting a slower process of converting investments in inventory and receivables into cash during those periods.

The most concerning quarter was Q1 2022, where the cash conversion cycle was the highest at -66.95 days, indicating a prolonged time taken to convert investments into cash. It is important for the company to focus on managing their working capital efficiently to ensure a smoother cash conversion cycle and optimize their liquidity position.