Dell Technologies Inc (DELL)

Cash conversion cycle

		Aug 2, 2024	May 3, 2024	Feb 2, 2024	Nov 3, 2023	Aug 4, 2023	May 5, 2023	Feb 3, 2023	Oct 28, 2022	Jul 29, 2022	Apr 29, 2022	Jan 28, 2022	Oct 29, 2021	Jul 30, 2021	Apr 30, 2021	Jan 29, 2021	Oct 30, 2020	Jul 31, 2020	May 1, 2020	Jan 31, 2020	Nov 1, 2019
Days of inventory on hand (DOH)	days	30.49	25.26	19.57	17.67	18.23	19.50	21.90	27.24	25.39	27.83	27.15	25.92	21.42	20.30	18.67	19.31	20.66	20.59	18.66	18.69
Days of sales outstanding (DSO)	days	65.02	53.78	19.17	18.18	18.74	—	64.73	57.39	63.09	58.43	65.40	71.79	70.49	65.03	75.56	68.52	68.58	—	68.83	—
Number of days of payables	days	123.42	108.76	104.76	—	—	86.39	85.26	99.33	109.35	113.45	124.92	127.54	116.82	114.28	118.35	112.62	111.84	104.94	114.12	111.57
Cash conversion cycle	days	-27.91	-29.71	-66.02	35.85	36.97	-66.90	1.36	-14.70	-20.87	-27.19	-32.38	-29.83	-24.91	-28.95	-24.11	-24.79	-22.60	-84.35	-26.62	-92.88

August 2, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 30.49 + 65.02 – 123.42
= -27.91

The cash conversion cycle of Dell Technologies Inc fluctuated over the analyzed period, indicating varying efficiency in managing its cash flow operations. A negative cash conversion cycle signifies that Dell is able to collect cash from customers before needing to pay its suppliers and vendors, resulting in a cycle where cash is generated before it is spent.

The company experienced a mix of positive and negative cash conversion cycles, with the most recent data showing a negative cash conversion cycle of -27.91 days. This indicates that Dell is efficient in managing its working capital, converting inventory into cash quickly and collecting receivables promptly.

However, there were periods, such as in February 2024 and May 2023, where Dell had a significantly longer cash conversion cycle, reaching -66.02 days and -66.90 days, respectively. This suggests inefficiencies in managing inventory, accounts payable, and accounts receivable during those periods.

Overall, Dell Technologies Inc should continue to focus on optimizing its cash conversion cycle to ensure efficient management of working capital, which can positively impact its liquidity and financial performance.