Genpact Limited (G)
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 | — | — | 27.38 | — | — | 27.17 | 30.09 | 17.16 | — | 24.85 | 27.60 | 21.87 | 22.65 | 27.92 | 22.17 | 16.74 | 19.27 | 30.69 | 30.85 | 30.00 |
| Days of sales outstanding (DSO) | days | 91.42 | 87.24 | 83.77 | 83.84 | 83.34 | 83.87 | 87.47 | 85.81 | 80.81 | 89.41 | 87.96 | 86.97 | 86.95 | 85.07 | 87.20 | 91.94 | 95.22 | 92.71 | 95.91 | 98.54 |
| Number of days of payables | days | 3.48 | 3.37 | 5.34 | 2.89 | 4.61 | 3.61 | 3.57 | 2.88 | 3.52 | 3.62 | 3.75 | 3.26 | 2.10 | 4.61 | 2.91 | 4.00 | 3.50 | 3.48 | 4.23 | 5.39 |
| Cash conversion cycle | days | 87.94 | 83.86 | 105.81 | 80.94 | 78.73 | 107.43 | 113.99 | 100.09 | 77.29 | 110.63 | 111.82 | 105.58 | 107.51 | 108.38 | 106.46 | 104.69 | 111.00 | 119.91 | 122.53 | 123.14 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 91.42 – 3.48
= 87.94
The cash conversion cycle of Genpact Ltd has shown some variability over the past eight quarters. In Q4 2023, the company's cash conversion cycle was 87.53 days, which increased compared to the previous quarter's 83.45 days. This indicates that it took Genpact longer to convert its investments in inventory and accounts receivable into cash in the most recent quarter.
Looking back over the past year, the company's cash conversion cycle ranged from a low of 78.09 days in Q2 2023 to a high of 87.53 days in Q4 2023. This variability suggests that Genpact has been managing its working capital efficiency with fluctuations in different quarters.
It's worth noting that the cash conversion cycle was generally higher in the first half of 2022, with Q2 2022 and Q1 2022 showing values of 83.63 days and 82.67 days, respectively. The cycle improved in the latter part of 2022 before trending upward again in Q4 2023.
Overall, a longer cash conversion cycle may indicate inefficiencies in managing cash flow, inventory, and receivables, potentially leading to higher working capital requirements. Genpact may need to focus on optimizing its operations to shorten the cash conversion cycle and improve its overall liquidity position.
Peer comparison
Dec 31, 2023