Insight Enterprises Inc (NSIT)
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 | 7.66 | 9.63 | 13.11 | 8.36 | 9.27 |
| Days of sales outstanding (DSO) | days | 142.58 | 115.33 | 114.68 | 118.48 | 119.72 |
| Number of days of payables | days | 103.25 | 75.77 | 83.57 | 81.87 | 74.30 |
| Cash conversion cycle | days | 47.00 | 49.19 | 44.22 | 44.97 | 54.69 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 7.66 + 142.58 – 103.25
= 47.00
Insight Enterprises Inc.'s cash conversion cycle has shown fluctuations over the past five years, ranging from 29.98 days to 44.45 days. A shorter cash conversion cycle indicates that the company is able to efficiently convert its investments into cash, while a longer cycle suggests possible liquidity challenges.
In 2023, the cash conversion cycle decreased to 29.98 days from 38.92 days in 2022, reflecting an improvement in the company's ability to manage its cash flow. This reduction could be attributed to enhanced inventory management, quicker accounts receivable collection, or more efficient accounts payable practices.
Comparing the 2023 figure to 2019, when the cycle was 44.45 days, demonstrates a substantial enhancement in Insight Enterprises Inc.'s working capital efficiency over the last five years. This positive trend indicates that the company has likely implemented effective strategies to optimize its cash conversion cycle, potentially leading to improved financial performance and liquidity.
Overall, the decreasing trend in Insight Enterprises Inc.'s cash conversion cycle highlights the company's efforts to manage its working capital effectively and convert its investments into cash efficiently. Continued monitoring and optimization of the cash conversion cycle will be essential for sustaining financial health and supporting future growth initiatives.
Peer comparison
Dec 31, 2023