Doximity Inc (DOCS)

Cash conversion cycle

		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
Days of inventory on hand (DOH)	days	—	41.49	20.34	25.41	34.92	39.43	—	—	—
Days of sales outstanding (DSO)	days	79.56	77.30	80.62	78.89	95.16	70.56	76.96	78.67	87.62
Number of days of payables	days	16.23	13.25	4.91	3.97	8.68	11.35	8.22	7.45	4.25
Cash conversion cycle	days	63.33	105.54	96.05	100.33	121.40	98.64	68.74	71.22	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 measures the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales. A shorter cash conversion cycle indicates better efficiency in managing working capital and liquidity.

Based on the data provided for Doximity Inc, we observe fluctuations in the cash conversion cycle over the past several reporting periods. In March 2024, the company had a cash conversion cycle of 63.33 days, indicating a more efficient conversion of resources into cash compared to the previous period in December 2023, where the cycle was 105.54 days.

The trend in the cash conversion cycle for Doximity Inc shows variability, with peaks and troughs observed in different quarters. The cycle was notably prolonged in March 2023 at 121.40 days, reflecting a potential lag in converting investments into cash at that point in time.

Overall, analyzing the cash conversion cycle over multiple periods provides insights into the company's working capital management and operational efficiency. It is essential for Doximity Inc to monitor and potentially streamline its cash conversion cycle to enhance liquidity and overall financial performance.