Gen Digital Inc. (GEN)

Cash conversion cycle

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Days of inventory on hand (DOH)	days	—	19.21	50.10	234.93	250.76
Days of sales outstanding (DSO)	days	32.27	31.82	20.23	30.48	38.26
Number of days of payables	days	32.95	47.72	56.36	52.43	80.80
Cash conversion cycle	days	-0.69	3.31	13.97	212.98	208.22

March 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 32.27 – 32.95
= -0.69

Based on the data provided, Gen Digital Inc.'s cash conversion cycle has exhibited variability over the past five years. The negative cash conversion cycle of -0.69 days as of March 31, 2024, indicates that the company is efficiently converting its inventory and accounts receivable into cash, possibly through timely collection of receivables and efficient inventory management. This negative cycle suggests that the company is able to collect cash from customers before paying its suppliers, thus operating with a favorable working capital position.

In contrast, the cash conversion cycle was significantly longer in the previous years, particularly in March 2021 and March 2020, at 212.98 days and 208.22 days, respectively. These extended cash conversion cycles imply that the company took a considerably longer time to convert its investments in inventory and accounts receivable into cash. This could have resulted from delays in collecting receivables, slow inventory turnover, or inefficiencies in the supply chain management.

It is evident that Gen Digital Inc. has made significant improvements in its cash conversion cycle over the years, transitioning from a lengthy cycle to achieving negative days in the most recent period. This trend indicates enhanced cash flow management and operational efficiency within the company. Management should continue to focus on maintaining this efficiency to sustain positive cash flows and support the company's financial health.