O’Reilly Automotive Inc (ORLY)

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	134.61	135.38	138.69	140.17	138.74	135.75	134.66	131.75	129.03	131.82	135.08	138.57	145.03	144.12	150.09	156.07	153.17	151.13	149.69	150.32
Days of sales outstanding (DSO)	days	12.00	13.11	12.42	11.79	12.02	12.40	12.15	10.99	10.67	11.26	11.30	11.48	10.52	10.93	11.36	11.00	10.73	11.09	12.79	12.10
Number of days of payables	days	176.03	181.22	186.46	186.81	187.19	182.86	176.80	169.34	164.35	166.58	169.75	165.21	166.13	166.84	167.43	164.91	159.85	162.77	161.33	160.09
Cash conversion cycle	days	-29.41	-32.73	-35.35	-34.86	-36.42	-34.72	-29.99	-26.60	-24.65	-23.49	-23.37	-15.16	-10.58	-11.80	-5.98	2.16	4.05	-0.55	1.15	2.33

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 134.61 + 12.00 – 176.03
= -29.41

O`Reilly Automotive, Inc.'s cash conversion cycle has shown fluctuations over the past eight quarters. The company's cash conversion cycle was consistently negative, indicating efficiency in managing its working capital during the periods under review.

The trend reveals that the company has been able to efficiently convert its investments in inventory into cash receipts from customers within a shorter period. Although the cycle fluctuated, it generally improved over time. This suggests that O`Reilly Automotive, Inc. has been successful in managing its receivables and payables effectively, resulting in a quicker cash conversion cycle.

Overall, the company's cash conversion cycle has shown a consistent improvement from Q4 2022 to Q4 2023, indicating efficient working capital management and liquidity management practices. This trend reflects positively on the company's operational efficiency and financial performance.