DXC Technology Co (DXC)

Cash conversion cycle

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Days of inventory on hand (DOH)	days	—	13.32	15.74	13.69	9.21
Days of sales outstanding (DSO)	days	86.88	87.04	86.49	85.56	81.89
Number of days of payables	days	23.36	18.28	20.28	17.21	22.78
Cash conversion cycle	days	63.52	82.08	81.95	82.04	68.31

March 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 86.88 – 23.36
= 63.52

The cash conversion cycle of DXC Technology Co has shown fluctuation over the past five years. In the most recent fiscal year ending on March 31, 2024, the cash conversion cycle decreased to 63.52 days from 82.08 days in the prior year. This indicates that the company was able to convert its investments in inventory and accounts receivable into cash more efficiently.

Comparing the current cash conversion cycle to the one in 2020, which was 68.31 days, we observe an improvement in the management of working capital. However, it is essential to note that the cash conversion cycle in 2022 and 2021 was also around 82 days, indicating some volatility in the efficiency of DXC Technology Co's working capital management during those periods.

Overall, the downward trend in the cash conversion cycle from 2023 to 2024 suggests that DXC Technology Co has been successful in streamlining its operations to generate cash more quickly. This could indicate improved inventory turnover and accounts receivable collection practices, leading to enhanced liquidity and potentially better financial performance for the company.