Royal Gold Inc (RGLD)
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 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 34.12 | 31.28 | 30.71 | 32.71 | 27.42 | 26.09 | 28.33 | 30.68 | 34.59 | 38.35 | 36.60 | 24.47 | 35.22 | 53.06 | 44.71 | 41.82 | 53.39 | 36.91 | 25.55 | 38.35 |
| Days of sales outstanding (DSO) | days | 0.58 | 5.56 | 3.35 | 1.94 | 1.61 | 8.44 | 5.76 | 1.03 | 1.86 | 8.94 | 4.32 | 2.48 | 2.32 | 2.54 | 8.90 | 5.48 | 2.80 | 1.78 | 8.38 | 7.54 |
| Number of days of payables | days | 27.82 | 35.66 | 37.25 | 33.23 | 32.05 | 22.85 | 22.73 | 20.77 | 18.27 | 20.54 | 19.64 | 18.07 | 15.77 | 19.20 | 13.52 | 7.78 | 9.03 | 7.85 | 3.21 | 7.93 |
| Cash conversion cycle | days | 6.88 | 1.18 | -3.19 | 1.42 | -3.02 | 11.69 | 11.35 | 10.94 | 18.17 | 26.76 | 21.29 | 8.89 | 21.77 | 36.40 | 40.10 | 39.52 | 47.16 | 30.83 | 30.72 | 37.97 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 34.12 + 0.58 – 27.82
= 6.88
The cash conversion cycle of Royal Gold Inc experienced significant fluctuations over the period from December 31, 2019, to December 31, 2024. The company's cash conversion cycle measures the time it takes for Royal Gold to convert its investments in inventory and other resources into cash flows from sales.
Initially, the cash conversion cycle ranged from around 30 to 50 days, reflecting the time taken for the company to manage its working capital efficiently. However, towards the end of the period, notably by the end of December 31, 2023, and throughout 2024, the cash conversion cycle showed negative values, indicating that Royal Gold was able to receive cash from its sales before needing to pay for its inventory and operating expenses.
Overall, the decreasing trend in the cash conversion cycle after 2021 suggests that Royal Gold improved its management of working capital, leading to a more efficient cash conversion process. This trend may indicate enhanced liquidity and operational efficiency for the company. It is essential for stakeholders to continue monitoring the cash conversion cycle to assess Royal Gold's working capital management and operational performance.