Etsy Inc (ETSY)
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 | 3.28 | 3.97 | 4.27 | 4.78 | 6.86 |
| Number of days of payables | days | 13.18 | 14.10 | 15.62 | 32.11 | 35.45 |
| Cash conversion cycle | days | -9.89 | -10.13 | -11.35 | -27.33 | -28.59 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 3.28 – 13.18
= -9.89
Etsy Inc's cash conversion cycle has shown a consistent improvement over the past five years, reflecting the company's effective management of its working capital and operational efficiency.
The cash conversion cycle, a metric that measures the time it takes for a company to convert its investments in inventory and other resources into cash inflows, has decreased from -28.59 days in 2019 to -9.89 days in 2023. This trend indicates that Etsy has been able to shorten the cycle and speed up the process of converting its resources into cash.
A negative cash conversion cycle suggests that Etsy is able to generate cash from sales before paying its suppliers, a favorable position that can help improve liquidity and working capital management.
Overall, the improvement in Etsy's cash conversion cycle over the years reflects the company's efficiency in managing its resources and potentially indicates a strong financial performance and effective supply chain management.
Peer comparison
Dec 31, 2023