Royal Caribbean Cruises Ltd (RCL)

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	7.81	10.51	9.64	10.30	11.44	9.60	10.73	10.21	10.25	12.95	13.69	10.71	6.61	6.40	5.91	6.42	6.66	7.08	7.37	7.24
Days of sales outstanding (DSO)	days	11.91	11.35	13.17	15.17	26.19	32.58	61.08	119.34	184.11	950.81	1,348.77	606.44	54.02	13.70	10.02	7.98	10.50	12.19	12.22	13.94
Number of days of payables	days	24.95	31.12	30.88	33.27	33.04	25.25	35.63	38.02	37.24	41.97	39.64	30.58	19.67	18.91	25.60	51.10	23.17	22.83	23.33	22.78
Cash conversion cycle	days	-5.23	-9.27	-8.08	-7.81	4.59	16.94	36.17	91.53	157.12	921.79	1,322.82	586.57	40.95	1.18	-9.67	-36.70	-6.01	-3.55	-3.74	-1.61

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 7.81 + 11.91 – 24.95
= -5.23

The cash conversion cycle of Royal Caribbean Group has shown fluctuating trends over the past eight quarters. In Q4 2023, the company had a negative cash conversion cycle of -30.91 days, indicating that it was able to convert its investments in inventory and receivables into cash relatively quickly. This represented a slight increase from the previous quarter's figure of -26.90 days.

On a year-over-year basis, the cash conversion cycle has shown improvement compared to Q4 2022 when it stood at -20.01 days. This suggests that the company has become more efficient in managing its working capital and converting it into cash over time.

Despite some variability quarter to quarter, Royal Caribbean Group has generally maintained a negative cash conversion cycle over the past two years. This indicates that the company is effectively managing its operations to minimize the time it takes to convert its investments into cash, which is a positive sign of operational efficiency and liquidity management.