Marriot Vacations Worldwide (VAC)
Cash conversion cycle
| 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 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 153.35 | 181.51 | 181.26 | 180.09 | 181.40 | 166.66 | 180.42 | 186.40 | 209.78 | 281.15 | 355.61 | 427.01 | 301.45 | 225.64 | 2.52 | 4.57 | 18.98 | 18.99 | 16.75 | 16.18 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 153.35 | 181.51 | 181.26 | 180.09 | 181.40 | 166.66 | 180.42 | 186.40 | 209.78 | 281.15 | 355.61 | 427.01 | 301.45 | 225.64 | 2.52 | 4.57 | 18.98 | 18.99 | 16.75 | 16.18 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 153.35 + — – —
= 153.35
The cash conversion cycle of Marriott Vacations Worldwide Corp has shown fluctuations over the past eight quarters. The cycle measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
In Q4 2023, the cash conversion cycle improved to 299.45 days compared to the previous quarter, indicating the company was able to effectively manage its working capital and generate cash from its operational activities more efficiently. However, the cycle had increased in the two preceding quarters, reaching its peak in Q2 2023 at 341 days, which may suggest challenges in managing inventory, receivables, and payables during that period.
Comparing the most recent data to the same quarter in the previous year, there has been an overall increase in the cash conversion cycle, indicating potential delays in receiving cash from sales and managing working capital in Q4 2023 compared to Q4 2022.
Overall, Marriott Vacations Worldwide Corp should focus on optimizing its working capital management to reduce the cash conversion cycle, which would help improve its liquidity, profitability, and operational efficiency.