ServiceNow Inc (NOW)
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 | 87.59 | 85.62 | 81.74 | 84.66 | 80.26 |
| Days of sales outstanding (DSO) | days | 82.84 | 86.90 | 86.05 | 81.53 | 88.11 |
| Number of days of payables | days | 23.94 | 63.58 | 24.01 | 12.57 | 24.28 |
| Cash conversion cycle | days | 146.49 | 108.95 | 143.78 | 153.62 | 144.09 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 87.59 + 82.84 – 23.94
= 146.49
The cash conversion cycle (CCC) of ServiceNow Inc has fluctuated over the past five years. In 2023, the CCC increased significantly to 77.65 days from 41.92 days in 2022. This indicates that the company took longer to convert its investments in inventory and other resources into cash during 2023. This increase may be attributed to changes in the company's inventory management, accounts receivable collection, or accounts payable policies. Compared to 2021 and 2020, the CCC improved in 2022, but it was still higher than in 2019. Overall, the company should continue to monitor and manage its cash conversion cycle to ensure efficient management of working capital and cash flow.
Peer comparison
Dec 31, 2023