Callaway Golf Company (MODG)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 127.25 | 221.22 | 215.84 | 229.93 | 259.75 | 240.86 | 277.12 | 314.97 | 333.25 | 256.50 | 218.82 | 207.96 | 221.95 | 127.87 | 95.95 | 81.25 | 74.04 | 70.77 | 84.06 | 95.93 |
| Days of sales outstanding (DSO) | days | 16.26 | 27.09 | 36.33 | 38.84 | 18.44 | 27.74 | 36.58 | 42.68 | 17.36 | 27.20 | 38.59 | 45.17 | 14.80 | 33.97 | 49.93 | 67.75 | 32.49 | 60.09 | 58.70 | 64.61 |
| Number of days of payables | days | 16.20 | 40.87 | 38.82 | 43.57 | 42.74 | 33.72 | 42.73 | 77.30 | 55.27 | 55.19 | 62.78 | 63.06 | 57.70 | 42.03 | 31.83 | 33.50 | 13.92 | — | — | — |
| Cash conversion cycle | days | 127.31 | 207.45 | 213.34 | 225.20 | 235.45 | 234.88 | 270.97 | 280.35 | 295.33 | 228.52 | 194.62 | 190.07 | 179.05 | 119.82 | 114.05 | 115.50 | 92.61 | 130.86 | 142.76 | 160.54 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 127.25 + 16.26 – 16.20
= 127.31
The cash conversion cycle of Callaway Golf Company has shown fluctuations over the period from March 31, 2020, to December 31, 2024. Initially, the company's cash conversion cycle was relatively high at 160.54 days in March 2020, indicating a significant time it took for Callaway to convert its investments in inventory back into cash.
Over time, there was a declining trend in the cash conversion cycle, reaching its lowest point of 92.61 days in December 2020. This decrease suggests that the company was able to manage its working capital more efficiently and improve its inventory turnover and collection of receivables during this period.
However, from March 31, 2021, the cash conversion cycle started to increase again, reaching 295.33 days by December 31, 2022. This prolonged cycle indicates potential challenges in managing inventory levels, accounts receivable, and accounts payable, leading to a longer time to convert investments into cash.
Subsequently, there was a slight improvement in the cash conversion cycle by December 31, 2024, where it decreased to 127.31 days. Despite this improvement, the company may still need to focus on optimizing its working capital management to shorten the cash conversion cycle and enhance its overall cash flow efficiency.
Peer comparison
Dec 31, 2024