Sun Country Airlines Holdings Inc (SNCY)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 4.28 | 4.48 | 4.81 |
| Days of sales outstanding (DSO) | days | 13.82 | 14.87 | 18.45 |
| Number of days of payables | days | 32.44 | 36.46 | 35.45 |
| Cash conversion cycle | days | -14.33 | -17.11 | -12.19 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 4.28 + 13.82 – 32.44
= -14.33
The cash conversion cycle for Sun Country Airlines Holdings Inc has shown a consistent downward trend over the past three years, indicating an improvement in their efficiency in converting input resources into cash.
In 2021, the company's cash conversion cycle was 17.67 days, which decreased to 14.33 days in 2022, and further reduced to 13.27 days in 2023. This demonstrates that the company has been able to reduce the time it takes to convert its investments in inventory and receivables into cash, which is a positive sign of effective working capital management.
A lower cash conversion cycle signifies that the company is able to generate cash quickly from its operational activities, indicating efficient inventory management and prompt collection from customers. This efficiency can lead to improved liquidity and financial health for Sun Country Airlines Holdings Inc.
Peer comparison
Dec 31, 2023