Dell Technologies Inc (DELL)

Cash conversion cycle

		Jan 31, 2025	Oct 31, 2024	Aug 2, 2024	Jul 31, 2024	May 3, 2024	Apr 30, 2024	Feb 2, 2024	Jan 31, 2024	Nov 3, 2023	Oct 31, 2023	Aug 4, 2023	Jul 31, 2023	May 5, 2023	Apr 30, 2023	Feb 3, 2023	Jan 31, 2023	Oct 31, 2022	Oct 28, 2022	Jul 31, 2022	Jul 29, 2022
Days of inventory on hand (DOH)	days	32.01	31.98	29.24	30.35	25.34	25.46	19.38	19.23	17.81	18.12	19.55	19.06	20.83	19.95	22.76	22.26	16.35	27.70	25.98	25.07
Days of sales outstanding (DSO)	days	—	—	63.16	—	54.15	—	19.01	—	18.34	—	20.00	—	—	—	66.53	—	—	58.26	—	66.90
Number of days of payables	days	—	—	118.36	—	109.09	—	103.75	—	—	—	—	—	92.30	—	88.63	—	—	101.02	—	107.98
Cash conversion cycle	days	32.01	31.98	-25.96	30.35	-29.59	25.46	-65.36	19.23	36.14	18.12	39.56	19.06	-71.47	19.95	0.67	22.26	16.35	-15.06	25.98	-16.00

January 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 32.01 + — – —
= 32.01

The cash conversion cycle is a key metric for analyzing a company's efficiency in managing its working capital. It represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Analyzing the cash conversion cycle of Dell Technologies Inc from July 2022 to January 2025 shows fluctuations in the efficiency of its working capital management.

- In July 2022 and October 2022, the company had negative cash conversion cycles, indicating that it was able to generate cash more quickly than it invested in its operations.
- From January 2023 to August 2023, the cash conversion cycle remained positive, suggesting that the company was taking longer to convert investments into cash flows.
- The cycle turned negative again in February 2024 and May 2024, implying improved efficiency in converting investments into cash.
- However, the cycle turned positive again from July 2024 to October 2024, showing a delay in converting investments to cash.

Analyzing these fluctuations can provide insight into Dell's working capital management practices, inventory turnover, and receivables collection efficiency. It is important for investors and management to monitor the cash conversion cycle to ensure optimal management of operating liquidity and working capital efficiency.