ExlService Holdings Inc (EXLS)

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	—	1.47	13.61	9.34	9.39
Days of sales outstanding (DSO)	days	69.46	67.00	64.38	81.23	91.39
Number of days of payables	days	1.33	2.33	2.13	3.01	2.63
Cash conversion cycle	days	68.14	66.13	75.86	87.57	98.14

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 69.46 – 1.33
= 68.14

The cash conversion cycle of ExlService Holdings Inc has shown some variability over the past five years. It increased from 64.26 days in 2019 to 71.30 days in 2023, with fluctuations in between. This indicates that the company's ability to convert its resources into cash has generally lengthened over this period.

A cash conversion cycle above industry averages may suggest inefficiencies in managing the company's working capital, impacting liquidity and profitability. Conversely, a lower cash conversion cycle indicates faster cash generation, potentially leading to improved financial health.

It is essential for ExlService Holdings Inc to continuously monitor and assess its cash conversion cycle to optimize its working capital management and enhance overall operational efficiency. Efforts to shorten the cycle can lead to increased cash flow and improved financial performance in the long run.