CDW Corp (CDW)
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 | 12.24 | 12.68 | 13.77 | 13.30 | 13.13 | 14.92 | 17.29 | 18.69 | 17.32 | 16.19 | 17.47 | 15.22 | 15.85 | 13.84 | 14.76 | 14.12 | 13.18 | 13.35 | 14.86 | 13.80 |
| Days of sales outstanding (DSO) | days | 86.95 | 83.08 | 82.66 | 76.20 | 76.85 | 77.79 | 79.27 | 84.93 | 87.14 | 71.71 | 70.84 | 70.49 | 71.45 | 74.74 | 68.30 | 71.47 | 69.23 | 69.69 | 72.77 | 68.18 |
| Number of days of payables | days | 52.77 | 46.97 | 49.98 | 45.03 | 46.29 | 53.05 | 56.20 | 56.67 | 58.14 | 43.72 | 43.40 | 41.89 | 43.56 | 41.06 | 38.42 | 41.32 | 39.57 | 42.01 | 46.83 | 40.79 |
| Cash conversion cycle | days | 46.41 | 48.79 | 46.45 | 44.47 | 43.69 | 39.67 | 40.36 | 46.94 | 46.32 | 44.17 | 44.92 | 43.82 | 43.75 | 47.53 | 44.63 | 44.27 | 42.84 | 41.03 | 40.79 | 41.20 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 12.24 + 86.95 – 52.77
= 46.41
The cash conversion cycle of CDW Corp has shown some fluctuations over the last eight quarters. In Q1 2022, the company had a relatively high cash conversion cycle of 29.51 days, indicating a longer period to convert its investments in inventory and other resources into cash. Subsequently, in Q2 2022, the cycle decreased to 25.15 days, reflecting an improvement in the efficiency of the company's working capital management.
Throughout the following quarters, the cash conversion cycle remained relatively stable, with slight fluctuations. However, in Q3 and Q4 2022, the company managed to significantly reduce the cycle to 24.02 days and 27.45 days, respectively, demonstrating effective management of cash flow and working capital.
Moving into 2023, the cash conversion cycle experienced some variability. In Q1 2023, the cycle was 27.46 days, slightly higher compared to the previous quarter. Despite this minor increase, the cycle in Q2 2023 decreased to 26.24 days, indicating improved efficiency in converting assets into cash.
In the most recent quarters, Q3 and Q4 2023, the cash conversion cycle has been relatively consistent at 28.24 days and 28.32 days, respectively. While these figures are slightly higher than some previous quarters, they suggest that CDW Corp may be facing challenges in optimizing its working capital efficiency and cash flow management.
Overall, CDW Corp's cash conversion cycle has shown variations, with periods of improvement and stability. It will be crucial for the company to focus on maintaining efficient working capital practices to support its financial health and operational performance in the future.
Peer comparison
Dec 31, 2023