Wingstop Inc (WING)
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 | 1.15 | 1.07 | 1.44 | 1.21 | 1.14 |
| Days of sales outstanding (DSO) | days | 9.84 | 9.66 | 10.48 | 7.23 | 9.46 |
| Number of days of payables | days | 10.13 | 14.36 | 16.12 | 11.14 | 12.12 |
| Cash conversion cycle | days | 0.86 | -3.63 | -4.20 | -2.70 | -1.52 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 1.15 + 9.84 – 10.13
= 0.86
The cash conversion cycle of Wingstop Inc has shown a mixed trend over the past five years. In 2023, the company's cash conversion cycle increased to 0.86 days from a negative value of -3.63 days in 2022. This indicates that Wingstop took slightly longer to convert its resources into cash in 2023 compared to the previous year.
Looking further back, in 2021, Wingstop had a cash conversion cycle of -4.20 days, reflecting the company's ability to efficiently manage its cash flows and convert resources into cash quickly. In 2020 and 2019, the cash conversion cycles were also negative at -2.70 days and -1.52 days, respectively, indicating a strong performance in cash conversion efficiency during those years.
Overall, Wingstop Inc has shown variability in its cash conversion cycle, with both positive and negative cycles observed in recent years. It is important for the company to focus on optimizing its working capital management to maintain a healthy cash conversion cycle and ensure efficient operations.
Peer comparison
Dec 31, 2023