T-Mobile US Inc (TMUS)
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 | 24.23 | 24.99 | 25.96 | 40.35 | 39.74 |
| Days of sales outstanding (DSO) | days | 39.39 | 43.10 | 44.54 | 43.04 | 44.67 |
| Number of days of payables | days | 63.97 | 83.01 | 99.39 | 102.15 | 87.50 |
| Cash conversion cycle | days | -0.35 | -14.92 | -28.89 | -18.77 | -3.10 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 24.23 + 39.39 – 63.97
= -0.35
The cash conversion cycle of T-Mobile US Inc has exhibited fluctuations over the years based on the provided data. As of December 31, 2020, the company had a negative cash conversion cycle of -3.10 days, which indicates that T-Mobile US Inc was able to convert its investments in inventory and receivables into cash quickly.
However, by December 31, 2021, the cash conversion cycle decreased further to -18.77 days, indicating an improvement in the efficiency of T-Mobile US Inc's cash management. This suggests that the company was able to further optimize its operations.
By December 31, 2022, the cash conversion cycle decreased significantly to -28.89 days, reflecting a rapid conversion of company's assets into cash. This may indicate effective inventory management and accounts receivable collection processes.
On December 31, 2023, the cash conversion cycle contracted to -14.92 days, showing that T-Mobile US Inc continued to effectively manage its working capital and cash flow operations efficiently.
On December 31, 2024, the cash conversion cycle was close to zero at -0.35 days, indicating that T-Mobile US Inc's cash cycle was almost instantaneous, with the company being able to convert its investments into cash almost immediately.
Overall, the trend observed indicates that T-Mobile US Inc has been proficient in managing its cash conversion cycle, consistently operating with a negative cycle, which indicates efficient working capital management and a strong liquidity position.