Guidewire Software Inc (GWRE)
Cash conversion cycle
| Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | Jul 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 8.27 | 4.89 | — | 13.34 | 20.84 |
| Days of sales outstanding (DSO) | days | 51.03 | 61.29 | 66.05 | 52.31 | 57.45 |
| Number of days of payables | days | 7.06 | 15.23 | 18.54 | 15.25 | 13.58 |
| Cash conversion cycle | days | 52.24 | 50.94 | 47.51 | 50.41 | 64.71 |
July 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 8.27 + 51.03 – 7.06
= 52.24
The cash conversion cycle of Guidewire Software Inc has shown a decreasing trend over the years, indicating improved efficiency in managing its working capital. The cycle, which represents the time it takes for the company to convert its investments in inventory and other resources into cash receipts, decreased from 64.71 days in July 2020 to 52.24 days in July 2024.
A lower cash conversion cycle suggests that Guidewire Software Inc is managing its inventory, accounts receivable, and accounts payable more efficiently, resulting in quicker cash generation from its operational activities. This trend is favorable as it indicates the company's ability to optimize its liquidity position and potentially improve its overall financial health.
Peer comparison
Jul 31, 2024