ExlService Holdings Inc (EXLS)

Cash conversion cycle

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	—	0.88	1.28	1.60	1.47	14.14	13.88	16.17	—	18.03	23.12	22.69	12.22	16.24	8.72	17.36	12.46	9.42	18.08	21.34
Days of sales outstanding (DSO)	days	69.46	70.04	68.58	71.67	67.00	75.47	69.51	74.41	64.38	66.44	65.24	60.12	81.09	58.91	59.32	68.91	91.15	68.17	69.93	70.71
Number of days of payables	days	1.33	0.85	0.84	0.97	2.33	1.10	1.46	1.70	2.13	1.47	2.09	4.66	3.94	3.50	4.94	4.30	3.50	1.94	1.78	2.61
Cash conversion cycle	days	68.14	70.06	69.03	72.30	66.13	88.50	81.92	88.89	62.25	83.01	86.28	78.14	89.38	71.65	63.10	81.96	100.12	75.65	86.23	89.45

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 fluctuated over the past eight quarters. Based on the data provided, the company's cash conversion cycle ranged from a low of 67.90 days in Q4 2022 to a high of 75.47 days in Q1 2022.

The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cycle indicates that the company is more efficient in managing its working capital and generating cash. Conversely, a longer cycle suggests potential inefficiencies in working capital management.

In the case of ExlService Holdings Inc, the trend in the cash conversion cycle shows some variability but generally remains within a relatively narrow range, indicating a consistent approach to managing working capital over the past two years. However, the company should aim to further optimize its cash conversion cycle to improve efficiency and cash flow generation.