Cogent Communications Group Inc (CCOI)
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 | — | 45.05 | 7.93 | — | — |
| Days of sales outstanding (DSO) | days | 59.30 | 28.59 | 27.57 | 34.25 | 30.03 |
| Number of days of payables | days | 19.55 | 23.51 | 10.48 | 8.91 | 10.46 |
| Cash conversion cycle | days | 39.74 | 50.13 | 25.01 | 25.34 | 19.57 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 59.30 – 19.55
= 39.74
The cash conversion cycle of Cogent Communications Holdings Inc has shown fluctuations over the past five years.
In 2019, the company had a cash conversion cycle of 8.66 days, indicating that it took approximately 8.66 days to convert its investment in inventory into cash from sales. This suggests efficient management of inventory and collection of receivables.
By 2020, the cash conversion cycle increased to 12.11 days, signaling a slight slowdown in the conversion cycle. This may be due to factors such as changes in sales patterns or delays in receivables collection.
In 2021, the cash conversion cycle further increased to 6.73 days, indicating a shorter cycle compared to the previous year. This implies an improvement in managing inventory, receivables, and payables.
However, by 2022, the cash conversion cycle turned negative to -16.67 days, which suggests that the company was able to collect cash from customers before paying its suppliers and without depleting inventory. This may indicate a highly efficient working capital management system.
In 2023, the cash conversion cycle increased to 20.12 days, potentially indicating a shift in the company's working capital efficiency. The increase in days may suggest factors such as longer collection periods or changes in inventory management practices.
Overall, a fluctuating cash conversion cycle for Cogent Communications Holdings Inc over the past five years indicates varying levels of efficiency in managing the company's working capital components. Monitoring and analyzing these fluctuations can provide insights into the company's financial management practices and operational effectiveness.
Peer comparison
Dec 31, 2023