Royal Caribbean Cruises Ltd (RCL)
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 | 11.18 | 11.64 | 12.36 | 20.63 | 15.67 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 11.18 | 11.64 | 12.36 | 20.63 | 15.67 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 11.18 + — – —
= 11.18
The cash conversion cycle of Royal Caribbean Cruises Ltd has shown a fluctuating trend over the past five years. Starting at 15.67 days as of December 31, 2020, the company's cash conversion cycle increased to 20.63 days by December 31, 2021. However, in the following years, there was a notable improvement, with the cycle decreasing to 12.36 days by December 31, 2022, 11.64 days by December 31, 2023, and further dropping to 11.18 days by December 31, 2024.
This indicates that Royal Caribbean Cruises Ltd has been managing its operating cycle more efficiently, resulting in a shorter time period for converting its investments in inventory and accounts receivable into cash. A decreasing cash conversion cycle suggests that the company is collecting payments from customers and selling inventory at a faster rate, enhancing its liquidity and potentially reducing reliance on external financing sources. The company's ability to shorten its cash conversion cycle over the years reflects positive operational efficiency and effective management of working capital.
Peer comparison
Dec 31, 2024