Kyndryl Holdings Inc (KD)

Cash conversion cycle

		Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022
Days of inventory on hand (DOH)	days	—	—	—	27.85	—	23.07	35.57
Days of sales outstanding (DSO)	days	44.93	44.07	46.02	40.96	40.88	40.47	42.72
Number of days of payables	days	38.97	39.45	32.30	41.59	44.66	42.15	37.88
Cash conversion cycle	days	5.97	4.62	13.71	27.23	-3.78	21.39	40.41

March 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 44.93 – 38.97
= 5.97

Kyndryl Holdings Inc's cash conversion cycle demonstrates fluctuations over the periods provided. The cash conversion cycle is a measure of how efficiently a company can convert its resources into cash flow.

On Mar 31, 2024, the company's cash conversion cycle was 5.97 days, indicating that it takes approximately 6 days to convert its investments in inventory and accounts receivable into cash received from customers. This represents a slight increase from the previous period on Dec 31, 2023, where the cycle was 4.62 days.

In contrast, on Jun 30, 2022, the cash conversion cycle was notably higher at 40.41 days. This suggests that the company took longer to convert its investments into cash during that period.

Interestingly, on Mar 31, 2023, the company reported a negative cash conversion cycle of -3.78 days, which implies that Kyndryl was able to collect cash from customers before paying its suppliers and vendors. This negative cycle could indicate efficient cash management and potentially favorable payment terms negotiated with suppliers.

Overall, fluctuations in the cash conversion cycle can signal changes in the company's operational efficiency and effectiveness in managing working capital. Further analysis would be necessary to better understand the drivers behind these fluctuations and whether they align with the company's overall strategy and industry norms.