Shake Shack Inc (SHAK)
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 | 3.23 | 2.86 | 2.94 | 3.24 | 3.40 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 3.23 | 2.86 | 2.94 | 3.24 | 3.40 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 3.23 + — – —
= 3.23
The cash conversion cycle of Shake Shack Inc has shown a decreasing trend over the years, indicating improved efficiency in managing its cash flow. As of December 31, 2020, the cash conversion cycle was 3.40 days, which decreased to 2.86 days by December 31, 2023. This reduction signifies that the company is taking less time to convert its investments in inventory and other resources into cash from sales. However, there was a slight increase to 3.23 days by December 31, 2024.
Overall, the downward trend in the cash conversion cycle suggests that Shake Shack Inc has been successful in streamlining its operations and optimizing its working capital management, leading to quicker conversion of resources into cash inflows. It is essential for the company to continue monitoring and fine-tuning its cash conversion cycle to maintain efficient cash flow management in the future.
Peer comparison
Dec 31, 2024