Shake Shack Inc (SHAK)
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 | Sep 23, 2020 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 2.29 | 1.79 | 2.03 | 2.26 | 2.76 | 2.88 | 2.69 | 2.35 | 2.32 | 2.27 | 2.60 | 2.98 | 3.24 | 3.16 | 3.55 | 3.18 | 3.71 | 3.18 | 3.08 | 2.73 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 5.46 | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 28.88 | — |
| Cash conversion cycle | days | 2.29 | 1.79 | 2.03 | 2.26 | 2.76 | 2.88 | 2.69 | 2.35 | 2.32 | 2.27 | 2.60 | 2.98 | 3.24 | 3.16 | 3.55 | 3.18 | 3.71 | 3.18 | -20.33 | 2.73 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 2.29 + — – —
= 2.29
The cash conversion cycle for Shake Shack Inc has shown varying trends over the periods indicated. The company's cash conversion cycle, which represents the time it takes to convert inventory into cash from sales, reached 2.73 days on June 30, 2020. Subsequently, on September 23, 2020, the cash conversion cycle turned negative to -20.33 days, indicating the company was able to collect cash from sales before paying off suppliers.
Afterward, the cash conversion cycle stabilized and ranged between 2.27 days to 3.71 days from 2020 to 2024. This suggests that Shake Shack Inc managed its inventory, accounts receivable, and accounts payable efficiently during this period, with a relatively short cash conversion cycle.
Overall, a decreasing trend in the cash conversion cycle from September 2024 (1.79 days) to March 2024 (2.26 days) may indicate improvements in the company's cash management and operational efficiency. This trend could potentially lead to better working capital management and increased liquidity for Shake Shack Inc.
Peer comparison
Dec 31, 2024