ACI Worldwide Inc (ACIW)

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	—	14.69	14.11	14.24	14.51
Days of sales outstanding (DSO)	days	54.21	24.27	21.67	49.20	53.18
Number of days of payables	days	23.33	25.17	23.60	24.17	21.88
Cash conversion cycle	days	30.89	13.79	12.18	39.27	45.81

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 54.21 – 23.33
= 30.89

The cash conversion cycle of ACI Worldwide Inc has fluctuated over the past five years. In 2023, the company's cash conversion cycle increased to 90.34 days from 78.48 days in 2022. This indicates that the company took longer to convert its investments in inventory and accounts receivable into cash during the year.

Looking back, the trend shows an improvement in cash conversion efficiency from 2020 to 2022, with the cash conversion cycle decreasing from 72.52 days to 78.48 days. However, in 2023, there was a reversal in this trend as the cash conversion cycle increased significantly.

Overall, ACI Worldwide Inc should focus on managing its working capital effectively to reduce the cash conversion cycle and optimize its cash flow operations. Further analysis of the components affecting the cash conversion cycle, such as accounts receivable collection periods and inventory turnover, is recommended to identify areas for improvement in working capital management.