Bill Com Holdings Inc (BILL)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	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
Days of inventory on hand (DOH)	days	—	—	—	—	1,269.84	1,113.60	1,178.24	1,140.36	1,326.55	—	—	—	—	—	—	—	—	—
Days of sales outstanding (DSO)	days	7.33	8.60	12.55	8.91	8.29	7.88	14.77	13.09	13.48	14.26	20.49	19.62	23.30	25.95	31.65	18.78	14.30	10.92
Number of days of payables	days	2.01	3.94	2.61	2.33	3.05	2.21	2.99	3.36	5.45	4.87	4.70	5.04	8.13	12.74	16.25	8.59	11.07	15.59
Cash conversion cycle	days	5.32	4.66	9.93	6.59	1,275.08	1,119.26	1,190.02	1,150.10	1,334.59	9.39	15.79	14.59	15.17	13.21	15.39	10.19	3.23	-4.67

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 7.33 – 2.01
= 5.32

The cash conversion cycle of Bill Com Holdings Inc has shown significant fluctuations over the periods analyzed. Starting from negative values in the earlier periods to positive values, it indicates changes in the company's efficiency in managing its working capital.

In the initial periods, the company had a negative cash conversion cycle, which suggests that it was able to generate cash from its operations before having to pay its suppliers. This could be a sign of effective inventory management or favorable credit terms with suppliers.

As the cycle turned positive, the company started taking longer to convert its inventory into sales and eventually into cash. This increase in days might indicate potential issues with inventory management, sales collection, or payment to suppliers.

The sudden spike in the cash conversion cycle in the later periods, soaring into the thousands of days, is likely a data anomaly or input error as such extreme values are unrealistic for a company's operations. This might be due to accounting irregularities or erroneous reporting.

Towards the end of the data, the cash conversion cycle returned to more reasonable levels, indicating a potential correction of the anomaly and a return to a more typical operational performance in managing its working capital.

Overall, fluctuations in the cash conversion cycle can provide insights into a company's efficiency in managing its cash flows, inventory, and receivables. Analyzing trends over time helps in identifying areas that may require improvement or further investigation for potential operational enhancements.