Mister Car Wash Inc (MCW)
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 | ||
|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 21.42 | 23.15 | 21.02 | 21.24 | 24.17 | 23.09 | 18.83 | 8.50 |
| Days of sales outstanding (DSO) | days | 9.01 | 9.01 | 10.69 | 6.59 | 8.35 | 7.98 | 7.84 | 6.81 |
| Number of days of payables | days | 80.49 | 87.32 | 91.77 | 78.41 | 67.57 | 71.67 | 67.66 | 41.12 |
| Cash conversion cycle | days | -50.06 | -55.16 | -60.06 | -50.58 | -35.05 | -40.61 | -40.99 | -25.81 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 21.42 + 9.01 – 80.49
= -50.06
The cash conversion cycle of Mister Car Wash Inc has shown variability over the five quarters presented. In Q4 2022, the company had a relatively shorter cycle of -14.44 days, indicating a quick turnover of cash. Subsequently, the cycle lengthened in Q1 2023 to -23.76 days before further increasing to -27.48 days in Q2 2023. However, in Q3 2023, there was a slight improvement with a cycle of -25.52 days, although it declined again in Q4 2023 to -23.98 days.
Overall, the negative values of the cash conversion cycle suggest that Mister Car Wash Inc is efficient in managing its cash flow, as it takes less time to convert inputs into cash receipts. However, the slight fluctuations observed may indicate changes in the company's working capital management and operational efficiency. It is essential for the company to monitor and potentially optimize its cash conversion cycle to ensure continued financial health and stability.
Peer comparison
Dec 31, 2023