Manhattan Associates Inc (MANH)
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 | 12.77 | — | — | — | — |
| Days of sales outstanding (DSO) | days | 71.44 | 79.43 | 69.80 | 69.24 | 60.23 |
| Number of days of payables | days | 15.11 | 18.67 | 16.59 | 16.75 | 18.11 |
| Cash conversion cycle | days | 69.10 | 60.76 | 53.21 | 52.49 | 42.12 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 12.77 + 71.44 – 15.11
= 69.10
The cash conversion cycle of Manhattan Associates, Inc. has exhibited fluctuations over the past five years. In 2023, the company's cash conversion cycle was 50.97 days, showing a slight improvement from the previous year. This indicates that it took Manhattan Associates approximately 50.97 days to convert its investments in inventory and other resources into cash flows from sales.
Comparing to 2021, there was an increase in the cash conversion cycle in 2022, reflecting a longer period for the company to collect cash from its operating cycle. However, in 2021, the company managed to reduce its cash conversion cycle to 45.81 days, a positive sign indicating more efficient management of its working capital.
The trend observed in the cash conversion cycle from 2020 to 2019 shows a significant improvement from 45.06 days to 34.07 days, suggesting that Manhattan Associates effectively managed its inventory, accounts receivable, and accounts payable during that period.
In conclusion, it is essential for Manhattan Associates to monitor and optimize its cash conversion cycle consistently to ensure efficient use of resources and better cash flow management.
Peer comparison
Dec 31, 2023