Callaway Golf Company (MODG)
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 | 260.19 | 334.81 | 220.65 | 74.04 | 103.14 |
| Days of sales outstanding (DSO) | days | 18.44 | 17.36 | 14.94 | 32.74 | 33.15 |
| Number of days of payables | days | 42.81 | 55.53 | 57.37 | 13.92 | 15.32 |
| Cash conversion cycle | days | 235.82 | 296.63 | 178.23 | 92.85 | 120.97 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 260.19 + 18.44 – 42.81
= 235.82
The cash conversion cycle of Topgolf Callaway Brands Corp has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle decreased to 175.50 days from the previous year's 204.81 days, indicating an improvement in the efficiency of its working capital management.
Comparing 2023 to 2022, the decrease in the cash conversion cycle suggests that the company managed its cash, accounts receivable, and accounts payable more effectively, resulting in a shorter time to convert resources into cash inflows.
However, when looking back at 2021 and 2020, the cash conversion cycle was higher in those years at 131.63 days and 144.07 days, respectively. This indicates that the company took longer to convert its investments in inventory back into cash during those periods.
Going even further back to 2019, the cash conversion cycle was at its highest at 184.16 days, suggesting that Topgolf Callaway Brands Corp took an extended period to convert its investments in inventory into cash flow.
In conclusion, the trend in the cash conversion cycle indicates that Topgolf Callaway Brands Corp has made improvements in its working capital management efficiency in recent years, leading to a shorter cash conversion cycle in 2023 compared to previous years. However, the company should continue to monitor and optimize its working capital processes to maintain this positive trend.
Peer comparison
Dec 31, 2023