Live Nation Entertainment Inc (LYV)
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 | 0.77 | 0.89 | 1.89 | 2.34 | 0.53 |
| Days of sales outstanding (DSO) | days | 33.90 | 32.81 | 63.22 | 98.31 | 32.54 |
| Number of days of payables | days | 4.55 | 4.16 | 6.19 | 9.18 | 3.30 |
| Cash conversion cycle | days | 30.12 | 29.55 | 58.93 | 91.47 | 29.77 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 0.77 + 33.90 – 4.55
= 30.12
The cash conversion cycle of Live Nation Entertainment Inc has shown significant fluctuations over the past five years. In 2023, the company's cash conversion cycle was negative at -10.20 days, indicating efficient cash management. This improvement from the positive cycle in 2022, which stood at 32.81 days, suggests a more streamlined operational process in converting raw materials into cash.
In contrast, the company experienced a highly negative cash conversion cycle of -71.61 days in 2021, which was a significant improvement from the relatively high cycle of 98.31 days in 2020. This negative cycle indicates that Live Nation Entertainment Inc was able to collect cash from customers before paying its suppliers and is operating efficiently in managing its working capital.
Overall, the fluctuation in Live Nation Entertainment Inc's cash conversion cycle over the past five years indicates varying degrees of efficiency and effectiveness in managing its cash flows, inventory turnover, and accounts payable. Further analysis is recommended to understand the factors driving these fluctuations and to identify opportunities for improvement in the company's working capital management.
Peer comparison
Dec 31, 2023