MGM Resorts International (MGM)

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	9.38	7.39	6.02	5.89	5.97	6.95	9.92	10.03	10.09	9.97	8.52	9.10	9.60	10.39	11.46	11.05	10.71	11.24	11.54	12.59
Days of sales outstanding (DSO)	days	24.98	23.75	21.18	17.29	22.72	24.21	24.50	29.95	35.30	36.42	41.53	57.22	34.93	60.11	45.16	35.73	41.44	39.43	17.99	19.69
Number of days of payables	days	30.56	22.45	16.50	15.88	17.51	24.76	30.95	27.63	29.96	28.93	22.72	17.78	15.49	16.06	13.14	21.07	24.52	27.35	30.01	38.08
Cash conversion cycle	days	3.80	8.69	10.69	7.29	11.17	6.40	3.46	12.35	15.42	17.45	27.33	48.54	29.04	54.44	43.48	25.71	27.64	23.31	-0.49	-5.80

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 9.38 + 24.98 – 30.56
= 3.80

The cash conversion cycle of MGM Resorts International has shown fluctuations over the past eight quarters. In Q1 2022, the cash conversion cycle was at its peak at 16.03 days, indicating that the company took an average of 16.03 days to convert its investments in inventory and other resources back into cash.

Since then, there has been a downward trend in the cash conversion cycle, reaching its lowest point in Q1 2023 at 8.37 days. This suggests that the company has been able to more efficiently manage its working capital and convert assets into cash quicker over time.

However, in the most recent quarter, Q4 2023, the cash conversion cycle slightly increased to 10.52 days. This increase may indicate a potential slowdown in the company's ability to convert assets into cash, which could be due to various factors such as changes in sales patterns, inventory management, or payment terms.

Overall, a lower cash conversion cycle is generally preferable as it signifies a more efficient management of the company's working capital. MGM Resorts International should continue to monitor and analyze its cash conversion cycle to ensure optimal efficiency in its operations.