Penn National Gaming Inc (PENN)

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	34.29	1.98	5.59	6.03	2.11	20.58	26.14	27.08	26.99	24.47	23.41	26.84	17.68	9.49	10.97	—	20.45	21.55	26.85	30.60
Days of sales outstanding (DSO)	days	18.30	14.08	16.12	14.59	14.05	8.90	9.85	7.24	12.05	10.49	10.16	13.43	9.83	19.00	11.99	7.39	6.11	6.54	8.54	10.30
Number of days of payables	days	5.56	7.74	8.87	7.97	7.61	7.53	7.66	9.17	10.88	8.02	8.59	6.39	5.67	12.35	5.88	13.58	10.74	11.70	10.29	14.15
Cash conversion cycle	days	47.03	8.32	12.83	12.64	8.54	21.95	28.33	25.15	28.17	26.95	24.98	33.88	21.84	16.14	17.09	-6.19	15.81	16.40	25.10	26.75

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 34.29 + 18.30 – 5.56
= 47.03

The cash conversion cycle of PENN Entertainment Inc has shown some fluctuations over the past eight quarters. It measures the time it takes for a company to convert its investments in inventory and other resources into cash flow from sales.

In Q4 2023, the cash conversion cycle increased to 14.96 days, which indicates the company took longer to convert its investments into cash compared to the previous quarter. This was also higher than the cycle in Q4 2022, suggesting a potential increase in the time taken to convert assets into cash.

The trend in the cash conversion cycle over the past two years has been somewhat volatile, with fluctuations in each quarter. The company experienced a significant decrease in the cycle in Q2 and Q3 2022, compared to previous quarters. However, there was a notable increase in the cycle in Q4 2022, which was followed by another increase in Q1 2023.

Overall, the increasing trend in the cash conversion cycle in recent quarters may indicate that PENN Entertainment Inc is taking longer to generate cash flow from its investments. It is essential for the company to monitor and manage its working capital efficiently to improve liquidity and optimize its cash conversion cycle in the future.