F5 Networks Inc (FFIV)

Cash conversion cycle

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Days of inventory on hand (DOH)	days	16.48	7.14	13.93	4.51	6.52
Days of sales outstanding (DSO)	days	50.31	58.71	63.13	47.51	45.79
Number of days of payables	days	14.65	12.61	23.06	12.69	15.07
Cash conversion cycle	days	52.14	53.24	54.00	39.32	37.24

September 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 16.48 + 50.31 – 14.65
= 52.14

The cash conversion cycle of F5 Networks Inc has shown some fluctuations over the past five years. It increased from 37.24 days in 2020 to 54.00 days in 2022, before starting to decrease again in the subsequent years. The company's cash conversion cycle reached 52.14 days in 2024.

The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales. A shorter cash conversion cycle is generally viewed positively as it indicates that the company is able to efficiently manage its working capital and generate cash quickly.

F5 Networks Inc's decreasing trend in the cash conversion cycle from 2022 to 2024 suggests an improvement in its efficiency in managing working capital and converting investments into cash. However, it is essential for the company to continue monitoring and optimizing its cash conversion cycle to sustain its operational efficiency and financial health.