Genpact Limited (G)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | 14.62 | 22.65 | 19.27 |
| Days of sales outstanding (DSO) | days | 91.42 | 83.34 | 80.81 | 86.95 | 95.22 |
| Number of days of payables | days | 3.48 | 4.61 | 3.52 | 2.10 | 3.50 |
| Cash conversion cycle | days | 87.94 | 78.73 | 91.91 | 107.51 | 111.00 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 91.42 – 3.48
= 87.94
The cash conversion cycle is an important metric that shows how quickly a company can convert its investments in inventory and other resources into cash flow from sales. From the data provided for Genpact Ltd over the past five years, we observe fluctuations in the cash conversion cycle:
- In 2023, the cash conversion cycle increased to 87.53 days, indicating that the company took longer to convert its investments into cash compared to the previous year.
- In 2022, there was a slight improvement in the cash conversion cycle to 78.45 days, suggesting that the company managed its working capital more effectively compared to 2021.
- In 2021, the cash conversion cycle decreased to 77.04 days, indicating a more efficient operation in converting investments into cash flow from sales.
- In 2020, there was a slight increase in the cash conversion cycle to 84.59 days, which could suggest potential challenges in managing working capital efficiently.
- In 2019, the cash conversion cycle was the highest at 91.29 days, indicating a longer time taken to convert investments into cash flow compared to the subsequent years.
Overall, the trend in the cash conversion cycle for Genpact Ltd shows some variability over the years, with fluctuations in efficiency in managing working capital and converting investments into cash flow. It is important for the company to focus on optimizing its cash conversion cycle to improve its liquidity and operational efficiency.
Peer comparison
Dec 31, 2023