TripAdvisor Inc (TRIP)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	—	—	—	—	—
Days of sales outstanding (DSO)	days	40.18	43.49	65.51	77.11	41.34
Number of days of payables	days	7.36	12.16	11.99	9.21	4.03
Cash conversion cycle	days	32.83	31.33	53.52	67.90	37.31

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 40.18 – 7.36
= 32.83

The cash conversion cycle of TripAdvisor Inc. has shown fluctuations over the past five years. The company's ability to efficiently convert its resources into cash improved significantly from 2019 to 2020, as the cash conversion cycle decreased from 0.10 days to -39.08 days. This indicates that TripAdvisor was able to convert its investments in inventory and accounts receivable into cash more rapidly in 2020.

However, in the subsequent years, the cash conversion cycle varied. In 2021, the cycle decreased further to -55.89 days, indicating continued efficiency in cash conversion. The following year, in 2022, there was a significant decrease in efficiency as the cycle extended to -72.56 days, suggesting potential challenges in managing working capital.

The latest data from 2023 shows a notable improvement, with the cash conversion cycle decreasing to -29.40 days. This indicates that TripAdvisor has been able to streamline its operations and leverage its working capital more effectively to generate cash.

Overall, while there have been fluctuations in the cash conversion cycle of TripAdvisor Inc. over the past five years, the recent improvement in 2023 suggests efforts towards enhancing operational efficiency and optimizing working capital management.