ExlService Holdings Inc (EXLS)

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	—	8.56	—	—	—	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
Days of sales outstanding (DSO)	days	60.50	70.46	70.28	73.99	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
Number of days of payables	days	1.30	0.97	0.74	0.79	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
Cash conversion cycle	days	59.20	78.05	69.54	73.20	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

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 60.50 – 1.30
= 59.20

The cash conversion cycle of ExlService Holdings Inc has shown fluctuations over the periods provided in the data. The cash conversion cycle is a measure of the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales.

From the data, we observe that the cash conversion cycle ranged from a low of 59.20 days on December 31, 2024, to a high of 89.38 days on December 31, 2020. The average cash conversion cycle over the periods appears to be around 75 days, indicating that, on average, it takes ExlService Holdings Inc approximately 75 days to convert its investments into cash inflows from sales.

It is worth noting that a lower cash conversion cycle is generally preferred, as it signifies that the company is able to efficiently manage its working capital and convert its resources into cash more quickly. Conversely, a higher cash conversion cycle may indicate inefficiencies in the company's operations or challenges in managing its working capital effectively.

In analyzing the trend, we can see that there are fluctuations in the cash conversion cycle over the periods, indicating potential changes in the company's operational efficiency, working capital management, or sales cycle. It would be essential for stakeholders and investors to monitor these fluctuations closely to assess any underlying factors that may be impacting the company's cash conversion cycle.