F5 Networks Inc (FFIV)

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	7.39	7.16	8.93	10.06	11.94	13.93	8.98	5.74	4.14	4.51	4.86	5.40	6.17	6.71	7.04	7.74	8.61	9.54	10.46	10.10
Days of sales outstanding (DSO)	days	66.50	58.65	56.63	63.20	64.75	63.05	61.58	56.44	56.90	47.46	54.91	55.17	52.39	45.88	47.72	53.46	56.94	52.42	52.81	53.49
Number of days of payables	days	12.38	12.63	12.69	13.87	14.48	23.06	15.05	14.22	11.58	12.69	10.59	11.78	13.41	15.51	13.29	14.07	13.93	17.37	16.15	20.57
Cash conversion cycle	days	61.50	53.17	52.88	59.40	62.22	53.92	55.50	47.96	49.45	39.28	49.18	48.79	45.14	37.08	41.47	47.14	51.62	44.59	47.12	43.02

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 7.39 + 66.50 – 12.38
= 61.50

The cash conversion cycle of F5 Inc has shown fluctuation over the past eight quarters, ranging from a high of 57.19 days in Q1 2023 to a low of 27.49 days in Q2 2022. The most recent data for Q1 2024 indicates a cash conversion cycle of 51.37 days, an increase from the previous quarter's 42.13 days.

The cash conversion cycle represents the time it takes for a company to convert its resources and investments into cash flows from sales. A longer cash conversion cycle suggests that the company takes more time to convert its investments in inventory and accounts receivable into cash, potentially indicating inefficiencies in working capital management.

F5 Inc's cash conversion cycle has generally been on the higher side, with fluctuations observed in different quarters. Management should focus on optimizing inventory levels, improving accounts receivable collection processes, and reducing the time taken to pay suppliers to shorten the cash conversion cycle and improve overall liquidity and efficiency.