Alphabet Inc Class A (GOOGL)
Cash conversion cycle
| Dec 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | — | — | 8.23 | 6.31 | 6.64 | 7.72 | 9.30 | 6.01 | 4.29 | 3.85 | 4.48 | 3.39 | 3.61 | 3.14 | 3.83 | 3.91 | 4.33 |
| Days of sales outstanding (DSO) | days | 54.76 | 52.94 | 52.64 | 51.44 | 57.32 | 50.81 | 49.22 | 46.45 | 52.20 | 46.76 | 48.70 | 48.15 | 57.13 | 53.32 | 54.64 | 53.11 | 63.04 | 54.41 | 47.62 | 52.10 |
| Number of days of payables | days | 19.93 | 17.96 | 15.88 | 16.58 | 20.51 | 16.16 | 15.03 | 12.00 | 14.83 | 18.58 | 13.38 | 10.77 | 19.86 | 16.20 | 17.62 | 19.50 | 24.08 | 20.12 | 19.49 | 19.98 |
| Cash conversion cycle | days | 34.84 | 34.99 | 36.76 | 34.86 | 36.80 | 42.89 | 40.50 | 41.09 | 45.09 | 37.49 | 41.33 | 41.67 | 41.12 | 41.60 | 40.42 | 37.21 | 42.10 | 38.12 | 32.04 | 36.45 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 54.76 – 19.93
= 34.84
The cash conversion cycle of Alphabet Inc Class A has shown fluctuations over the past few years. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
From March 2020 to March 2024, the cash conversion cycle ranged from a low of 32.04 days to a high of 45.09 days. Generally, a lower cash conversion cycle indicates that the company is able to efficiently manage its working capital and turn its resources into cash quickly.
The cycle saw some volatility but trended upwards in the latter half of 2022 and into 2023 before experiencing a slight decline towards the end of 2024. This could suggest potential challenges in managing inventory, receivables, and payables during these periods.
Overall, Alphabet Inc Class A's cash conversion cycle provides insight into the company's operational efficiency and liquidity management. It is essential for the company to monitor and optimize its cash conversion cycle to sustain healthy financial performance and ensure effective cash flow management.
Peer comparison
Dec 31, 2024