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.