Yelp Inc (YELP)
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 | — | — | — | — | — | 15.32 | 12.25 | 22.53 | — | — | 71.51 | 68.38 | — | — | — | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 39.49 | 44.23 | 43.22 | 41.27 | 39.94 | 39.72 | 40.32 | 37.56 | 37.66 | 38.65 | 38.97 | 37.54 | 36.63 | 33.85 | 29.97 | 30.43 | 38.44 | 37.43 | 36.10 | 34.10 |
| Number of days of payables | days | 4.71 | 15.78 | 27.11 | 49.98 | 54.71 | 6.01 | 14.73 | 16.22 | 75.37 | 93.73 | 85.47 | 34.74 | 56.51 | 66.20 | 15.16 | 34.51 | 35.10 | 19.09 | 18.24 | 18.64 |
| Cash conversion cycle | days | 34.78 | 28.45 | 16.11 | -8.71 | -14.77 | 49.03 | 37.84 | 43.87 | -37.71 | -55.08 | 25.02 | 71.17 | -19.87 | -32.35 | 14.81 | -4.07 | 3.34 | 18.34 | 17.86 | 15.46 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 39.49 – 4.71
= 34.78
The cash conversion cycle measures how efficiently a company manages its working capital. A positive cash conversion cycle indicates that the company takes longer to convert its investment in inventory and accounts receivable into cash, while a negative cycle suggests more rapid conversion.
From the data provided, Yelp Inc's cash conversion cycle has fluctuated significantly over the past eight quarters, ranging from a low of -26.02 days in Q2 2022 to a high of 23.15 days in Q3 2023.
In Q4 2023, Yelp Inc's cash conversion cycle was 1.97 days, indicating that the company efficiently converted its inventory and accounts receivable into cash during that period. This contrasts with the third quarter of 2023, where the cycle was 23.15 days, suggesting a slower conversion process and potentially inefficient management of working capital.
Overall, it is essential for Yelp Inc to monitor its cash conversion cycle regularly to ensure efficient working capital management, optimize cash flow, and enhance overall financial performance.
Peer comparison
Dec 31, 2023