Altair Engineering Inc (ALTR)

Cash conversion cycle

		Mar 31, 2024	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
Days of inventory on hand (DOH)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	2.94	3.03	1.92	3.06	5.19	5.58
Days of sales outstanding (DSO)	days	87.45	124.29	81.59	86.58	90.62	117.60	88.78	77.64	85.82	103.34	69.85	73.19	86.87	99.24	76.40	68.94	74.05	89.14	78.13	77.61
Number of days of payables	days	5.98	8.21	4.58	4.15	5.37	9.44	5.78	4.72	5.87	6.42	4.83	6.56	7.05	9.31	5.90	5.18	6.00	10.95	12.66	12.87
Cash conversion cycle	days	81.48	116.08	77.01	82.42	85.25	108.16	83.00	72.93	79.95	96.92	65.02	66.62	79.82	89.93	73.44	66.80	69.97	81.26	70.67	70.32

March 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 87.45 – 5.98
= 81.48

Altair Engineering Inc's cash conversion cycle has fluctuated over the past few quarters, indicating varying efficiency in managing its working capital. The company's cash conversion cycle decreased from 116.08 days in December 2023 to 81.48 days in March 2024, which suggests an improvement in its ability to convert inventory and receivables into cash.

However, looking at historical data, the company's cash conversion cycle has generally been on the higher side, with peaks seen in December 2019 and December 2023. This indicates that Altair Engineering Inc may have faced challenges in efficiently managing its operating cycle and converting sales into cash during those periods.

Overall, Altair Engineering Inc should continue to monitor and strive to reduce its cash conversion cycle to enhance liquidity, optimize working capital management, and improve overall financial performance.