Accenture plc (ACN)

Cash conversion cycle

		Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020	Aug 31, 2019
Days of inventory on hand (DOH)	days	—	—	—	—	—
Days of sales outstanding (DSO)	days	60.86	62.13	63.54	59.22	63.07
Number of days of payables	days	16.31	17.74	19.20	16.23	20.10
Cash conversion cycle	days	44.56	44.39	44.34	42.99	42.97

August 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 60.86 – 16.31
= 44.56

The cash conversion cycle (CCC) of Accenture plc has shown some variability over the past five years. The CCC measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A negative CCC indicates that the company is generating cash more quickly than it is spending it on the production and sale of goods and services.

In 2023, the CCC improved to -20.96 days from -22.30 days in 2022, indicating that Accenture was able to convert its resources into cash even more efficiently. This was also an improvement from the -24.29 days in 2021. However, the CCC was lower in 2020 at -16.23 days and in 2019 at -20.10 days, suggesting that the company took longer to convert its investments into cash during those years.

Overall, the negative CCC over the years reflects the efficient management of working capital and suggests that the company is able to quickly convert its investments into cash, which can be a positive indicator of strong financial performance. However, it's important to consider other financial metrics and factors in conjunction with the CCC to gain a comprehensive understanding of Accenture's financial health.