Appfolio Inc (APPF)
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 | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 16.12 | 12.62 | 12.76 | 7.40 | 10.85 |
| Number of days of payables | days | 0.87 | 2.12 | 2.23 | 1.65 | 3.65 |
| Cash conversion cycle | days | 15.25 | 10.51 | 10.53 | 5.75 | 7.21 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 16.12 – 0.87
= 15.25
The cash conversion cycle of Appfolio Inc has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle increased to 15.25 days from 10.51 days in the previous year. This indicates that it took Appfolio Inc longer to convert its resources into cash during the latest period. Comparing the data to 2021, the cash conversion cycle remained relatively stable at 10.53 days, showing a slight increase in 2022.
Furthermore, looking at the trend from 2020 and 2019, there was an increase in the cash conversion cycle from 5.75 days in 2020 to 7.21 days in 2019. This suggests that Appfolio Inc took more time to convert its investments in assets and inventory back into cash compared to the prior year.
Overall, the upward trend in the cash conversion cycle highlights potential inefficiencies in managing Appfolio Inc's working capital and operating cycle. It is essential for the company to assess and improve its processes to enhance liquidity and optimize cash flow management in the future.
Peer comparison
Dec 31, 2023