CDW Corp (CDW)
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 | 12.24 | 13.13 | 17.32 | 15.85 | 13.18 |
| Days of sales outstanding (DSO) | days | 86.95 | 76.85 | 87.14 | 71.60 | 69.38 |
| Number of days of payables | days | 52.77 | 46.29 | 58.14 | 43.56 | 39.57 |
| Cash conversion cycle | days | 46.41 | 43.69 | 46.32 | 43.89 | 42.99 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 12.24 + 86.95 – 52.77
= 46.41
CDW Corp's cash conversion cycle, a key measure of efficiency in managing cash flow, has exhibited some fluctuations over the past five years. In 2023, the cash conversion cycle stands at 28.32 days, slightly higher than the previous year's figure of 27.45 days. This indicates that, on average, it takes approximately 28.32 days for the company to convert its investment in inventory into cash received from customers.
Comparing to 2021 and 2020, where the cash conversion cycle was 30.77 days and 26.67 days, respectively, we observe a slight improvement in efficiency in 2020. However, the most recent data suggests a slight deterioration in this aspect of the company's operations.
Over the five-year period, CDW Corp has generally maintained a relatively stable cash conversion cycle, with fluctuations occurring within a narrow range between 26.67 and 30.77 days. This indicates that the company has been consistent in managing its cash flow efficiency, although there may be room for further optimization in converting working capital into cash.
Overall, the trend in CDW Corp's cash conversion cycle shows some variability, but the company has demonstrated a generally efficient management of its working capital to generate cash inflows from operations. Further analysis and comparison with industry benchmarks could provide additional insights into the company's performance in this area.
Peer comparison
Dec 31, 2023