Amazon.com Inc (AMZN)

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	31.38	49.90	52.32	49.62	50.82	36.97	39.61	36.81	34.93	34.48	27.66	28.77	30.81	33.93	29.94	30.91	35.80	35.57	37.70	35.23
Days of sales outstanding (DSO)	days	33.36	28.78	27.24	26.33	30.24	26.40	26.27	24.93	25.65	22.87	22.15	21.22	23.28	21.93	22.68	22.06	27.20	23.32	24.36	24.25
Number of days of payables	days	80.03	101.48	99.35	97.16	117.57	68.36	73.94	72.11	84.19	79.67	75.80	77.13	93.92	83.38	77.96	65.67	82.41	67.85	73.17	68.20
Cash conversion cycle	days	-15.29	-22.80	-19.79	-21.21	-36.51	-4.99	-8.06	-10.37	-23.60	-22.32	-25.98	-27.14	-39.84	-27.52	-25.34	-12.69	-19.42	-8.96	-11.12	-8.72

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 31.38 + 33.36 – 80.03
= -15.29

The cash conversion cycle of Amazon.com Inc. has shown fluctuations over the past eight quarters, ranging from -28.70 days to -13.88 days. A negative cash conversion cycle is generally considered favorable as it indicates that the company is able to convert its inventory into cash quickly.

In Q4 2023, the cash conversion cycle was -28.70 days, indicating a longer period required to convert inventory into cash compared to the other quarters. However, this was an improvement from Q4 2022 when the cycle was -27.03 days.

Q3 2023 saw a decrease in the cash conversion cycle to -16.25 days, followed by a further reduction to -13.88 days in Q2 2023. This suggests that the company was able to manage its inventory and accounts receivable efficiently during these periods.

Overall, the trend shows that Amazon.com Inc. has been able to effectively manage its working capital and convert inventory and receivables into cash quickly over the analyzed quarters.