Cognizant Technology Solutions Corp Class A (CTSH)

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	Jun 30, 2020	Mar 31, 2020
Days of inventory on hand (DOH)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Days of sales outstanding (DSO)	days	75.07	79.08	75.27	72.28	72.59	71.50	70.67	69.90	71.32	69.47	71.76	70.62	70.15	71.52	71.67	70.10	67.66	67.94	69.88	69.55
Number of days of payables	days	7.37	6.71	6.61	6.39	7.38	7.07	6.98	7.36	7.98	8.19	7.99	8.96	8.40	8.34	8.55	8.71	9.77	10.59	9.17	7.45
Cash conversion cycle	days	67.70	72.38	68.66	65.89	65.21	64.43	63.69	62.54	63.33	61.28	63.77	61.66	61.75	63.17	63.11	61.39	57.90	57.35	60.71	62.10

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 75.07 – 7.37
= 67.70

The cash conversion cycle of Cognizant Technology Solutions Corp Class A has shown some fluctuations over the years. From March 31, 2020, to December 31, 2024, the cycle ranged between 57.35 days to 72.38 days. A lower cash conversion cycle indicates that the company is more efficient in converting its investments in inventory and other resources into cash.

The trend in the cash conversion cycle for Cognizant Technology Solutions Corp Class A has been somewhat irregular, with fluctuations observed over different periods. The cycle increased from September 2024 to June 2024 but decreased towards the end of the time frame analyzed.

Analyzing the cash conversion cycle is crucial as it provides insights into how effectively the company manages its working capital. A longer cycle implies that the company ties up more funds in its operations before receiving cash inflows, potentially impacting its liquidity and overall financial health.