SkyWest Inc (SKYW)
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 | 34.84 | 35.02 | 33.72 | 36.33 | 11.37 |
| Days of sales outstanding (DSO) | days | 12.35 | 10.47 | 12.38 | 8.99 | 6.19 |
| Number of days of payables | days | — | 129.57 | 115.49 | 173.22 | 34.75 |
| Cash conversion cycle | days | 47.19 | -84.07 | -69.39 | -127.91 | -17.19 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 34.84 + 12.35 – —
= 47.19
The Cash Conversion Cycle (CCC) of SkyWest Inc has shown significant fluctuations over the past five years. As of December 31, 2020, the company had a negative CCC of -17.19 days, indicating that it was able to convert its investments in inventory into cash relatively quickly. However, this metric deteriorated in subsequent years, reaching a low of -127.91 days by December 31, 2021, suggesting that the company was taking longer to convert its inventory into sales revenue and cash.
Despite this decline, there was a partial improvement in the CCC by December 31, 2022, when it stood at -69.39 days. The trend reversed in the following year, with the CCC worsening to -84.07 days as of December 31, 2023. Finally, by December 31, 2024, the company's CCC had turned positive, standing at 47.19 days. This indicated that SkyWest Inc was taking more time to convert its resources invested in inventory into cash flow.
The fluctuations in the CCC suggest that SkyWest Inc may have experienced challenges in managing its working capital efficiently over the analyzed period. Monitoring and optimizing the cash conversion cycle is crucial for the company to maintain liquidity and operational efficiency.
Peer comparison
Dec 31, 2024