Envestnet Inc (ENV)
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 | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 37.37 | 30.89 | 30.13 | 30.83 | 29.22 |
| Number of days of payables | days | 8.74 | 3.38 | 6.63 | 21.48 | 22.62 |
| Cash conversion cycle | days | 28.63 | 27.51 | 23.50 | 9.35 | 6.61 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 37.37 – 8.74
= 28.63
The cash conversion cycle of Envestnet Inc. has displayed fluctuations over the past five years. In 2023, the company's cash conversion cycle decreased to 11.87 days from 18.79 days in 2022, indicating an improvement in cash management efficiency. This reduction suggests that the company took less time to convert its investments in inventory and other resources into cash during the year.
Comparing with the prior years, the cash conversion cycle was also lower in 2021 at 15.43 days compared to 2020 at 10.81 days. However, a significant improvement was seen in 2020 compared to 2019, where the cash conversion cycle was 7.13 days. Despite the fluctuations, a general trend of the company managing its cash conversion more effectively over the years can be observed.
Overall, the decreasing trend in the cash conversion cycle over the years signifies that Envestnet Inc. has been more efficient in managing its working capital, which could positively impact its liquidity and operational performance.
Peer comparison
Dec 31, 2023