Wyndham Hotels & Resorts Inc (WH)

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 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Days of inventory on hand (DOH) days — — — — — — — — — — 67.91 29.92 68.13 — — — — — 42.89 74.38
Days of sales outstanding (DSO) days 71.63 72.80 71.04 65.40 62.92 71.07 66.88 58.42 57.05 58.30 56.79 50.94 57.37 72.45 81.91 83.90 82.70 79.32 66.71 54.16
Number of days of payables days 39.96 64.11 69.08 66.08 34.76 51.03 70.32 37.18 43.67 40.69 40.02 32.31 37.72 64.18 66.55 24.45 24.28 35.05 33.64 56.47
Cash conversion cycle days 31.67 8.69 1.95 -0.67 28.16 20.03 -3.44 21.24 13.39 17.61 84.68 48.54 87.79 8.27 15.36 59.45 58.42 44.27 75.96 72.06

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 71.63 – 39.96
= 31.67

The cash conversion cycle measures how efficiently a company manages its working capital by assessing the time it takes to convert its resources into cash. For Wyndham Hotels & Resorts Inc, the trend in the cash conversion cycle over the past few quarters has been fluctuating.

From March 31, 2020, to September 30, 2020, there was an improvement in the cash conversion cycle, indicating better management of working capital. However, this trend reversed in December 31, 2020, when the cycle increased to 58.42 days. Subsequently, there were periods of significant improvement in the cycle, such as in June 30, 2021, September 30, 2021, and December 31, 2021, where the cycle decreased substantially, showing efficient working capital management.

Notably, there were periods of negative cash conversion cycle days in June 30, 2023, March 31, 2024, and June 30, 2024. This implies that during those quarters, Wyndham Hotels & Resorts Inc was able to generate cash before paying its suppliers, which can be a positive indicator of financial health and efficient operations.

Overall, the company demonstrates some variability in its cash conversion cycle, but there are instances of effective working capital management and periods of rapid conversion of resources into cash. Continuous monitoring and analysis of this metric can provide insights into the company's operational efficiency and financial health.