Viad Corp (VVI)
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 | 683.23 | 537.56 | 302.73 | 97.11 | 503.49 |
| Days of sales outstanding (DSO) | days | 38.93 | 39.44 | 70.17 | 16.10 | 37.47 |
| Number of days of payables | days | 5,208.85 | 3,639.53 | 2,457.45 | 234.09 | 2,526.63 |
| Cash conversion cycle | days | -4,486.69 | -3,062.54 | -2,084.55 | -120.88 | -1,985.68 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 683.23 + 38.93 – 5,208.85
= -4,486.69
The cash conversion cycle of Viad Corp. measures the time taken to convert its investments in inventory into cash receipts from customers. A lower cash conversion cycle indicates that the company is able to efficiently manage its working capital and turn inventory into cash quickly.
As per the data provided, the trend of Viad Corp.'s cash conversion cycle over the past five years shows a fluctuating pattern. In 2020, the cash conversion cycle was notably low at 7.52 days, indicating efficient management of inventory and collection of receivables. However, in 2021, the cycle significantly increased to 27.31 days, suggesting a delay in converting inventory to cash.
The cycle improved in 2022, dropping to 18.26 days, but still remained higher than the levels seen in 2020. The most recent data for 2023 shows a decrease to 16.20 days, continuing the trend of improvement in efficiency.
Overall, Viad Corp. has shown variability in its cash conversion cycle over the years, which could be attributed to changes in inventory management, sales terms, or receivables collection practices. The company may benefit from focusing on strategies to consistently reduce this cycle, enhancing its working capital efficiency and cash flow management.
Peer comparison
Dec 31, 2023