Planet Fitness Inc (PLNT)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 11.38 | 8.98 | 10.85 | 1.63 | 0.89 |
| Days of sales outstanding (DSO) | days | 29.86 | 20.86 | 28.51 | 31.79 | 43.22 |
| Number of days of payables | days | 60.90 | 45.69 | 42.39 | 39.41 | 36.60 |
| Cash conversion cycle | days | -19.65 | -15.85 | -3.03 | -5.99 | 7.51 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 11.38 + 29.86 – 60.90
= -19.65
The cash conversion cycle of Planet Fitness Inc has shown a trend of improvement over the years, decreasing from 7.51 days at the end of December 2020 to -19.65 days as of December 31, 2024. A negative cash conversion cycle indicates that the company is able to convert its inventory and accounts receivable into cash faster than it pays its accounts payable, which can be seen as a positive sign of efficiency in managing working capital. Planet Fitness Inc has effectively shortened its cash conversion cycle, enhancing its ability to generate cash and potentially improving liquidity and financial performance.