Doximity Inc (DOCS)

Cash conversion cycle

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022
Days of inventory on hand (DOH)	days	—	34.92	—
Days of sales outstanding (DSO)	days	79.56	95.16	87.62
Number of days of payables	days	16.23	8.68	4.25
Cash conversion cycle	days	63.33	121.40	83.38

March 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 79.56 – 16.23
= 63.33

The cash conversion cycle of Doximity Inc has exhibited fluctuations over the past three years. As of March 31, 2024, the company's cash conversion cycle stands at 63.33 days, reflecting a significant improvement compared to the previous year when it was 121.40 days. This suggests that Doximity has become more efficient in converting its investments in inventory and accounts receivable into cash during the recent fiscal period.

In the fiscal year ending March 31, 2022, the company had a cash conversion cycle of 83.38 days, indicating that it took longer to convert its resources into cash compared to the most recent year. The significant decrease in the cash conversion cycle from 2023 to 2024 is a positive sign, demonstrating that Doximity has been managing its working capital more effectively and possibly improving its operational efficiency.

Overall, the decreasing trend in the cash conversion cycle is a favorable indicator for Doximity Inc as it signifies a faster conversion of resources into cash, potentially leading to improved liquidity and operational performance. Monitoring this metric will be crucial for assessing the company's efficiency in managing its working capital in the future.