eBay Inc (EBAY)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | 241.30 | — |
| Days of sales outstanding (DSO) | days | 3.39 | 3.35 | 3.43 | 16.91 | 34.39 |
| Number of days of payables | days | 34.40 | 35.55 | 36.09 | 56.47 | 52.74 |
| Cash conversion cycle | days | -31.01 | -32.19 | -32.65 | 201.74 | -18.34 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 3.39 – 34.40
= -31.01
EBay Inc.'s cash conversion cycle has exhibited a generally improving trend over the past five years. The company's cash conversion cycle decreased from -15.64 days in 2019 to -31.01 days in 2023. This indicates that EBay has been able to convert its resources into cash at a faster rate over the years.
A negative cash conversion cycle suggests that EBay has efficient working capital management, as it is able to collect cash from customers more quickly than it pays its suppliers and converts inventory into sales. This can be a favorable sign of effective operations and liquidity management within the company.
The decreasing trend in the cash conversion cycle indicates that EBay has been able to optimize its working capital processes, potentially through improved inventory management, faster receivables collection, and lengthening payables payment periods. Overall, the company's ability to operate with a negative cash conversion cycle suggests effective management of its working capital and efficient cash flow operations.
Peer comparison
Dec 31, 2023