Electronic Arts Inc (EA)

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	—	—	—	—	—
Days of sales outstanding (DSO)	days	27.27	33.62	33.94	33.78	30.39
Number of days of payables	days	23.48	20.16	19.83	23.45	18.13
Cash conversion cycle	days	3.79	13.46	14.11	10.33	12.26

March 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 27.27 – 23.48
= 3.79

The cash conversion cycle of Electronic Arts Inc has shown fluctuations over the past five years.

In March 2024, the company's cash conversion cycle decreased significantly to 3.79 days, showing an efficient management of cash from sales to collection, and then reinvestment in inventory. This indicates that the company is able to convert its investments in inventory into cash quickly.

In March 2023 and March 2022, the cash conversion cycle was higher at 13.46 days and 14.11 days, respectively. This suggests that it took Electronic Arts Inc longer to convert its investments in inventory back into cash during these years, potentially impacting liquidity and operational efficiency.

In March 2021 and March 2020, the cash conversion cycle was relatively lower at 10.33 days and 12.26 days, respectively, compared to the preceding years. This indicates an improvement in the company's working capital management during those periods.

Overall, a lower cash conversion cycle is favorable as it reflects efficient management of working capital and cash flow within the company. It indicates that Electronic Arts Inc is able to generate cash quickly from its operating cycle, which can be reinvested or used for other purposes, leading to improved financial health and performance.