Planet Fitness Inc (PLNT)
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 | 11.38 | 10.19 | 10.42 | 9.54 | 8.98 | 13.33 | 12.44 | 10.47 | 10.85 | 5.00 | 3.87 | 2.34 | 1.63 | 7.43 | 2.31 | 0.95 | 0.89 | 6.28 | 7.46 | 5.66 |
| Days of sales outstanding (DSO) | days | 30.36 | 19.17 | 19.80 | 13.62 | 20.83 | 18.79 | 23.22 | 12.28 | 28.55 | 25.79 | 25.84 | 22.73 | 31.79 | 19.46 | 27.51 | 27.89 | 40.78 | 38.37 | 28.25 | 18.20 |
| Number of days of payables | days | 60.90 | 66.76 | 59.57 | 39.57 | 45.69 | 50.18 | 53.47 | 35.54 | 42.39 | 26.31 | 28.40 | 32.32 | 39.41 | 39.35 | 34.90 | 29.61 | 36.60 | 68.77 | 30.78 | 75.57 |
| Cash conversion cycle | days | -19.15 | -37.41 | -29.35 | -16.41 | -15.88 | -18.06 | -17.81 | -12.79 | -2.99 | 4.48 | 1.31 | -7.25 | -5.98 | -12.45 | -5.09 | -0.76 | 5.08 | -24.12 | 4.93 | -51.70 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 11.38 + 30.36 – 60.90
= -19.15
The cash conversion cycle of Planet Fitness Inc has shown fluctuations over the years from negative to positive values. A negative cash conversion cycle typically indicates efficient management of cash flows and working capital, as the company is able to convert its inventory and receivables into cash faster than paying its payables.
From March 31, 2020, to December 31, 2024, the cash conversion cycle varied from -51.70 days to 4.48 days, showcasing fluctuations in the company's liquidity management. In recent periods, the company has maintained a negative cash conversion cycle, implying effective control over its working capital and operating cycle.
The negative cash conversion cycle indicates that Planet Fitness Inc is able to convert its investments and operating expenses into cash at a faster rate than settling its short-term liabilities. This reflects the company's ability to efficiently manage its inventory, accounts receivable, and accounts payable, which could potentially lead to improved cash flows and overall financial performance.