Fair Isaac Corporation (FICO)

Cash conversion cycle

		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	Dec 31, 2019
Days of inventory on hand (DOH)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	49.51	—	—	—	—	—
Days of sales outstanding (DSO)	days	135.46	152.54	165.68	140.19	152.58	154.55	146.53	133.46	135.90	128.26	112.35	110.40	123.99	114.97	117.47	136.78	145.41	136.38	135.02	126.91
Number of days of payables	days	23.56	24.04	21.15	21.33	22.31	19.72	15.99	19.85	20.86	21.75	20.78	23.88	22.78	20.26	20.04	22.06	23.28	20.35	26.08	33.72
Cash conversion cycle	days	111.90	128.50	144.53	118.86	130.27	134.82	130.54	113.61	115.03	106.52	91.57	86.52	101.21	94.71	146.95	114.73	122.13	116.03	108.93	93.20

September 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 135.46 – 23.56
= 111.90

The cash conversion cycle of Fair Isaac Corporation has exhibited fluctuations over the past few quarters. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales.

In analyzing the data provided, we observe that the company's cash conversion cycle has ranged from 86.52 days to 146.95 days over the last eight quarters. A shorter cash conversion cycle indicates that the company is able to efficiently manage its working capital and convert its resources into cash more quickly, which is generally favorable.

However, the trend in Fair Isaac Corporation's cash conversion cycle shows some variability, with periods of both improvement and deterioration. For example, the cycle decreased from 144.53 days in March 2024 to 91.57 days in June 2022, indicating more efficient management of working capital during that period.

It is essential for the company to closely monitor and manage its cash conversion cycle to ensure optimal efficiency in working capital management. Fluctuations in the cycle may be influenced by factors such as inventory management, accounts receivable collection, and accounts payable turnover. By identifying areas of improvement and implementing strategies to streamline the conversion cycle, Fair Isaac Corporation can enhance its liquidity and operational efficiency.