Sun Country Airlines Holdings Inc (SNCY)

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
Days of inventory on hand (DOH) days 5.51 5.21 4.55 4.67 4.29 4.26 4.15 3.83 4.48 4.59 4.31 4.38 4.81
Days of sales outstanding (DSO) days 11.92 13.28 15.86 13.39 13.82 15.78 10.15 13.90 14.87 14.16 18.28 16.56 18.24
Number of days of payables days 29.50 26.34 32.73 32.64 32.46 30.86 31.65 32.86 36.46 31.54 39.63 38.89 35.45
Cash conversion cycle days -12.07 -7.86 -12.32 -14.57 -14.35 -10.83 -17.35 -15.13 -17.11 -12.78 -17.03 -17.94 -12.40

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 5.51 + 11.92 – 29.50
= -12.07

The cash conversion cycle of Sun Country Airlines Holdings Inc has been consistently negative over the provided periods, indicating efficient management of cash flows. A negative cash conversion cycle means that the company's operating cycle (time taken to convert inventory to cash) is shorter than its payment cycle (time taken to pay suppliers).

The trend in the cash conversion cycle shows some fluctuations, with the lowest cycle of -17.94 days in March 2022 and the highest of -7.86 days in September 2024. Despite these variations, the company has generally maintained a tight control over its working capital efficiency.

The negative cash conversion cycle suggests that Sun Country Airlines Holdings Inc is able to collect cash from customers before paying its suppliers, which can be advantageous in terms of cash management and liquidity. It indicates that the company has efficient processes in place to collect receivables promptly and manage inventory effectively.

Overall, the consistently negative cash conversion cycle demonstrates Sun Country Airlines Holdings Inc's ability to efficiently convert its resources into cash, which is a positive sign for the company's financial health and operational efficiency.