Mister Car Wash Inc (MCW)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 17.88 | 20.29 | 7.45 |
| Days of sales outstanding (DSO) | days | 9.01 | 8.35 | 12.59 |
| Number of days of payables | days | 67.19 | 56.71 | 32.17 |
| Cash conversion cycle | days | -40.31 | -28.08 | -12.13 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 17.88 + 9.01 – 67.19
= -40.31
The cash conversion cycle of Mister Car Wash Inc has exhibited fluctuations over the past three years. In 2021, the company had a negative cash conversion cycle of -17.43 days, indicating that Mister Car Wash was able to convert its inventory and accounts receivable into cash quickly. This trend improved further in 2022, with a more favorable cycle of -14.44 days, suggesting an even quicker conversion process.
However, in 2023, the cash conversion cycle worsened to -23.98 days, resulting in a longer period for Mister Car Wash to convert its inventory and receivables into cash. Despite the negative values indicating efficient cash conversion, the increasing trend in the cash conversion cycle over the years could suggest potential issues in managing inventory, receivables, or payables, warranting further investigation to maintain the company's financial health.
Peer comparison
Dec 31, 2023