Electronic Arts Inc (EA)

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	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019
Days of inventory on hand (DOH)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Days of sales outstanding (DSO)	days	27.27	41.33	50.33	24.89	33.62	41.36	46.04	29.32	33.94	54.09	58.84	35.54	33.78	50.08	27.62	31.98	30.39	54.06	61.46	23.91
Number of days of payables	days	23.48	12.57	30.15	14.83	20.16	12.84	27.19	13.75	19.83	17.85	28.71	17.52	23.45	22.50	44.31	12.66	18.13	16.18	42.17	15.80
Cash conversion cycle	days	3.79	28.76	20.18	10.06	13.46	28.53	18.86	15.57	14.11	36.24	30.13	18.02	10.33	27.59	-16.69	19.31	12.26	37.88	19.29	8.12

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 fluctuated over the past few quarters. It measures the time it takes for the company to convert its investments in inventory and accounts receivable into cash inflows.

The company's cash conversion cycle was relatively short in the first quarter of 2020, indicating effective management of its working capital. However, in subsequent quarters, the cycle increased significantly, reaching its peak at 36.24 days in the fourth quarter of 2021. This suggests that Electronic Arts Inc may have experienced challenges in efficiently converting its assets into cash during that period.

There was a notable improvement in the cash conversion cycle in the third quarter of 2022 when it decreased to -16.69 days. A negative cash conversion cycle implies that the company's accounts payable were being paid more slowly than its accounts receivable and inventory were being converted into cash, which can indicate a favorable liquidity position.

For the most recent quarter, the cash conversion cycle increased to 3.79 days, indicating a more efficient management of working capital compared to the earlier quarters in 2023. Overall, Electronic Arts Inc has shown fluctuations in its cash conversion cycle, reflecting changes in its operational efficiency and working capital management capabilities.