Adobe Systems Incorporated (ADBE)

Cash conversion cycle

		Nov 29, 2024	Dec 1, 2023	Dec 2, 2022	Dec 3, 2021	Nov 27, 2020
Days of inventory on hand (DOH)	days	—	—	—	—	—
Days of sales outstanding (DSO)	days	35.17	41.82	42.91	43.43	39.65
Number of days of payables	days	55.88	48.69	63.90	61.06	64.86
Cash conversion cycle	days	-20.71	-6.86	-20.98	-17.64	-25.21

November 29, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 35.17 – 55.88
= -20.71

The cash conversion cycle of Adobe Systems Incorporated has shown fluctuations over the years based on the data provided. As of November 27, 2020, the company had a negative cash conversion cycle of -25.21 days, indicating that it was efficient in managing its cash flow from the beginning to the end of the cycle.

By December 3, 2021, the cash conversion cycle improved further to -17.64 days, suggesting the company was able to reduce the time it took to convert its investments in inventory and receivables into cash.

However, by December 2, 2022, the cash conversion cycle increased slightly to -20.98 days, suggesting a temporary slowdown in the efficiency of cash conversion.

Subsequently, on December 1, 2023, the cash conversion cycle decreased significantly to -6.86 days, indicating a notable improvement in the company's ability to manage its working capital and cash flow efficiently.

As of November 29, 2024, the cash conversion cycle increased to -20.71 days, displaying a reversal of the previous improvement seen in 2023.

Overall, Adobe Systems Incorporated generally maintained a negative cash conversion cycle over the years, indicating efficient management of its working capital and a quick conversion of investments into cash. However, the fluctuations observed in the cycle suggest variations in the company's cash management efficiency during different periods.