Wingstop Inc (WING)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | 1.15 | 1.07 | 1.44 | 1.21 |
| Days of sales outstanding (DSO) | days | 11.47 | 9.84 | 9.66 | 10.48 | 7.23 |
| Number of days of payables | days | 11.97 | 10.13 | 14.36 | 16.12 | 11.14 |
| Cash conversion cycle | days | -0.50 | 0.86 | -3.63 | -4.20 | -2.70 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 11.47 – 11.97
= -0.50
The cash conversion cycle of Wingstop Inc has seen fluctuations over the past five years. In 2020, the company had a negative cash conversion cycle of -2.70 days, which improved to -4.20 days in 2021. However, in 2022, there was a slight decrease to -3.63 days before turning positive in 2023 with a cycle of 0.86 days. The trend reversed again in 2024 to a negative cycle of -0.50 days.
Overall, Wingstop Inc has been managing its cash conversion cycle well, with periods of negative cycles indicating efficient management of working capital and quicker conversion of inventory and receivables into cash. The slight increase in the cycle in 2023 suggests potential challenges in managing cash flow efficiently, which is something the company may need to address for optimal financial performance.
Peer comparison
Dec 31, 2024