Now Inc (DNOW)
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 | 70.09 | 73.00 | 80.77 | 88.16 | 74.80 | 85.29 | 87.93 | 86.61 | 85.32 | 85.23 | 83.26 | 79.73 | 71.57 | 73.12 | 80.11 | 80.07 | 72.06 | 74.07 | 70.93 | 71.20 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 70.09 | 73.00 | 80.77 | 88.16 | 74.80 | 85.29 | 87.93 | 86.61 | 85.32 | 85.23 | 83.26 | 79.73 | 71.57 | 73.12 | 80.11 | 80.07 | 72.06 | 74.07 | 70.93 | 71.20 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 70.09 + — – —
= 70.09
The cash conversion cycle of Now Inc, a measure of how quickly the company can convert its resources into cash flows, has exhibited some fluctuations over the periods examined. From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from a low of 70.09 days to a high of 88.16 days.
In general, a shorter cash conversion cycle is favorable as it indicates that the company is efficiently managing its working capital and can quickly convert inventory into sales and then into cash. Conversely, a longer cash conversion cycle may suggest inefficiencies in the company's operations or difficulties in collecting receivables.
Analyzing the trend over time, Now Inc experienced an increase in its cash conversion cycle from March 31, 2020, to a peak on June 30, 2024, before declining slightly by the end of the period on December 31, 2024. This fluctuation indicates that the company may have faced challenges in managing its working capital efficiently during certain periods, impacting its ability to convert its resources into cash promptly.
Overall, monitoring the cash conversion cycle is crucial for assessing Now Inc's liquidity management and operational efficiency, as well as identifying areas for improvement in working capital management.
Peer comparison
Dec 31, 2024