PC Connection Inc (CNXN)
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 | 16.44 | 25.25 | 26.85 | 20.32 | 16.72 |
| Days of sales outstanding (DSO) | days | 85.04 | 78.00 | 82.67 | 95.49 | 78.47 |
| Number of days of payables | days | 34.90 | 28.15 | 36.63 | 38.48 | 31.61 |
| Cash conversion cycle | days | 66.58 | 75.10 | 72.88 | 77.32 | 63.58 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 16.44 + 85.04 – 34.90
= 66.58
The cash conversion cycle for PC Connection Inc has fluctuated over the past five years. In 2023, the company's cash conversion cycle was 66.58 days, which was an improvement compared to the previous year's cycle of 75.10 days. This indicates that PC Connection Inc was able to manage its working capital more efficiently in 2023.
Looking back at the trend over the past five years, the company's cash conversion cycle was relatively stable between 2019 and 2021, ranging from 63.58 days to 77.32 days. However, there was a notable improvement in 2023 compared to 2020 and 2021.
The cash conversion cycle is a measure of how long it takes for a company to convert its investments in inventory and accounts receivable into cash flows from sales. A shorter cash conversion cycle typically indicates that a company is able to sell its inventory quickly, collect payments from customers promptly, and manage its working capital effectively.
Overall, the improvement in PC Connection Inc's cash conversion cycle in 2023 suggests that the company was more efficient in managing its working capital and converting its investments into cash during that period. It is important for the company to continue monitoring and optimizing its cash conversion cycle to enhance its overall financial performance and liquidity position.
Peer comparison
Dec 31, 2023