Shake Shack Inc (SHAK)
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 23, 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 | 3.54 | 3.71 | 3.92 | 3.81 | 3.75 | 3.81 | 3.90 | 3.97 | 4.35 | 4.22 | 4.68 | 4.00 | 4.37 | 3.17 | 2.62 | 1.95 | 1.97 | 1.66 | 1.70 | 1.76 |
| Days of sales outstanding (DSO) | days | 5.65 | 4.88 | 5.28 | 5.44 | 5.64 | 4.99 | 5.26 | 5.47 | 6.77 | 5.97 | 6.79 | 6.05 | 6.65 | 5.49 | 5.59 | 4.13 | 6.12 | 9.71 | 7.69 | 4.44 |
| Number of days of payables | days | 14.60 | 17.09 | 14.24 | 13.86 | 18.31 | 16.39 | 16.18 | 14.05 | 22.55 | 21.35 | 34.54 | 35.60 | 35.57 | 29.76 | 23.15 | 14.64 | 12.67 | 14.80 | 3.84 | 13.68 |
| Cash conversion cycle | days | -5.41 | -8.51 | -5.05 | -4.61 | -8.91 | -7.60 | -7.02 | -4.62 | -11.44 | -11.16 | -23.07 | -25.54 | -24.55 | -21.09 | -14.94 | -8.55 | -4.58 | -3.43 | 5.54 | -7.48 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 3.54 + 5.65 – 14.60
= -5.41
The cash conversion cycle of Shake Shack Inc has displayed fluctuating trends over the past few years. The company's ability to convert its invested resources into cash has varied significantly, with negative values indicating efficient utilization but also potentially tighter liquidity management.
In recent quarters, the cash conversion cycle has shown improvements, moving from negative figures towards breakeven and then slightly positive values. This suggests a potential slowdown in the company's cash conversion efficiency or a change in its operational or financial strategies.
It is important for Shake Shack Inc to closely monitor and manage its cash conversion cycle to ensure optimal cash flow management and efficient utilization of resources. A longer cash conversion cycle may indicate inefficiencies in managing inventory, receivables, and payables, which could negatively impact the company's liquidity and overall financial health. Additionally, a negative cash conversion cycle, while beneficial in terms of liquidity, may also point to potential challenges in sustaining profitability or growth.
Peer comparison
Dec 31, 2023