Guidewire Software Inc (GWRE)
Cash conversion cycle
| Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | 8.39 | — | — | — | 4.96 | 6.36 | — | — | — | — | 23.76 | — | — | — | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 34.23 | 51.03 | 40.00 | 50.92 | 37.30 | 61.33 | 54.12 | 54.33 | 38.97 | 66.05 | 40.12 | 54.62 | 40.64 | 52.31 | 35.39 | 45.37 | 38.70 | 57.45 | 41.84 | 53.28 |
| Number of days of payables | days | 14.41 | 7.16 | 11.22 | 10.34 | 8.96 | 15.46 | 15.55 | 16.67 | 18.41 | 18.77 | 14.83 | 12.75 | 14.74 | 15.44 | 14.40 | 13.77 | 13.00 | 13.76 | 12.74 | 20.74 |
| Cash conversion cycle | days | 19.82 | 52.26 | 28.78 | 40.58 | 28.34 | 50.84 | 44.92 | 37.65 | 20.56 | 47.28 | 25.29 | 65.63 | 25.91 | 36.87 | 20.98 | 31.60 | 25.70 | 43.69 | 29.10 | 32.54 |
October 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 34.23 – 14.41
= 19.82
The cash conversion cycle of Guidewire Software Inc has shown fluctuations over the period from January 2020 to October 2024. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
From the data provided, we observe that the cash conversion cycle ranged from a low of 20.56 days in October 2022 to a high of 65.63 days in January 2022. A lower cash conversion cycle indicates that the company is able to efficiently manage its working capital and generate cash from its operations more quickly.
In analyzing the trend, we can see that there are periods of significant improvement in the cash conversion cycle, such as in April 2021 and October 2024, where the cycle decreased significantly. Conversely, there are instances where the cycle increased notably, like in January 2022 and July 2023.
Overall, fluctuations in the cash conversion cycle can indicate changes in the company's ability to manage its working capital effectively, streamline operations, and collect receivables efficiently. Investors and stakeholders may monitor this metric closely as it reflects the efficiency and liquidity of the company's operations.
Peer comparison
Oct 31, 2024