Equifax Inc (EFX)
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 | — | 12.06 | 10.45 | 11.01 | 8.37 |
| Days of sales outstanding (DSO) | days | 66.03 | 63.41 | 55.61 | 57.85 | 57.24 |
| Number of days of payables | days | 16.51 | 22.51 | 20.40 | 16.83 | 14.09 |
| Cash conversion cycle | days | 49.52 | 52.95 | 45.66 | 52.04 | 51.52 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 66.03 – 16.51
= 49.52
The cash conversion cycle of Equifax, Inc. has fluctuated over the past five years, with the cycle ranging from 14.95 days in 2021 to 32.07 days in 2023. A shorter cash conversion cycle indicates that the company is efficient in converting its resources into cash. In 2021, Equifax demonstrated the most efficient performance in this aspect.
However, in 2023, the cash conversion cycle increased to 32.07 days, indicating a slower conversion of resources into cash compared to the previous years. This may suggest potential issues with managing working capital or delays in collecting receivables during that period. Equifax should examine its operational processes to identify areas for improvement to potentially shorten the cash conversion cycle and enhance liquidity efficiency.