Exelixis Inc (EXEL)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Days of inventory on hand (DOH)	days	12.26	11.76	11.97	12.08	10.28	15.27	18.32	19.94	23.47	19.70	25.22	22.83	22.07	23.76	23.28	24.54	25.95	25.92	21.03	22.29
Days of sales outstanding (DSO)	days	44.67	47.29	71.87	47.55	47.35	51.04	49.57	51.32	48.66	47.90	55.26	45.75	71.90	52.25	54.20	62.91	59.46	63.31	44.26	51.19
Number of days of payables	days	20.92	33.18	16.66	14.92	20.03	16.17	16.63	21.75	23.03	22.55	15.26	13.86	19.48	20.46	19.06	13.70	29.24	64.30	11.52	22.15
Cash conversion cycle	days	36.02	25.86	67.19	44.71	37.59	50.14	51.26	49.51	49.11	45.06	65.22	54.72	74.49	55.55	58.43	73.75	56.17	24.93	53.77	51.33

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 12.26 + 44.67 – 20.92
= 36.02

The cash conversion cycle is a measure of how efficiently a company manages its working capital, representing the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle indicates that the company is able to quickly sell its products/services, collect payments, and manage its cash flow effectively.

Analyzing the cash conversion cycle of Exelixis Inc over the provided periods reveals fluctuations in the efficiency of its working capital management. From March 31, 2020, to June 30, 2020, the cash conversion cycle increased slightly, indicating a possible slowdown in the conversion of investments into cash. However, by September 30, 2020, there was a significant improvement in the cycle, suggesting enhanced operational efficiency and better cash flow management.

The cycle increased again by December 31, 2020, reaching its peak up to that point. This could indicate potential issues in inventory management or delays in collecting receivables. The trend continued into March 31, 2021, with a further increase in the cycle, possibly reflecting challenges in converting investments into cash during that period.

Exelixis Inc managed to reduce its cash conversion cycle by the end of June 30, 2021, indicating a positive turnaround in working capital management. However, the cycle increased again by December 31, 2021, showing fluctuations in the company's operational efficiency and cash flow dynamics.

From March 31, 2022, to September 30, 2024, the cash conversion cycle fluctuated within a certain range, with varying levels of efficiency in working capital management. The cycle decreased significantly by September 30, 2024, suggesting improvements in inventory turnover and quicker conversion of sales into cash.

Overall, Exelixis Inc's cash conversion cycle exhibits fluctuations over the analyzed periods, indicating changes in the company's working capital efficiency and cash flow dynamics. Monitoring and managing the cash conversion cycle effectively can help the company optimize its working capital, improve liquidity, and enhance overall financial performance.