Alphabet Inc Class A (GOOGL)
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 | — | 7.72 | 3.85 | 3.14 | 5.07 |
| Days of sales outstanding (DSO) | days | 57.29 | 52.24 | 57.05 | 62.76 | 62.00 |
| Number of days of payables | days | 20.51 | 14.83 | 19.86 | 24.08 | 28.23 |
| Cash conversion cycle | days | 36.78 | 45.13 | 41.04 | 41.82 | 38.84 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 57.29 – 20.51
= 36.78
The cash conversion cycle of Alphabet Inc has exhibited fluctuations in recent years. On December 31, 2023, the company's cash conversion cycle decreased to 36.43 days from 44.85 days in the previous year. This indicates an improvement in the efficiency of Alphabet Inc's working capital management. The reduction in the cash conversion cycle suggests that the company has been able to collect cash from its customers, convert inventory into sales, and pay suppliers more efficiently, leading to a shorter operating cycle. This trend is encouraging as it reflects potential improvements in liquidity and working capital management. However, it would be important to assess the underlying reasons for this change and monitor future developments to determine the sustainability of this improvement.
Peer comparison
Dec 31, 2023