Insperity Inc (NSP)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	—	—	80.16	93.61	102.27
Days of sales outstanding (DSO)	days	45.98	39.22	38.37	37.73	33.50
Number of days of payables	days	10.34	13.18	10.08	10.31	11.39
Cash conversion cycle	days	35.64	26.04	108.45	121.03	124.38

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 45.98 – 10.34
= 35.64

Insperity Inc's cash conversion cycle has shown a decreasing trend over the years, indicating an improvement in the efficiency of its working capital management.

As of December 31, 2020, the cash conversion cycle stood at 124.38 days. By December 31, 2021, it decreased to 121.03 days, and further improved to 108.45 days by December 31, 2022. This trend continued with significant efficiency gains, as the cash conversion cycle dropped to 26.04 days by December 31, 2023, and slightly increased to 35.64 days by December 31, 2024.

The decreasing trend in the cash conversion cycle signifies that Insperity Inc has been able to reduce the time it takes to convert its investments in inventory and other resources into cash. This could imply better management of accounts payable, accounts receivable, and inventory, leading to improved liquidity and potentially higher profitability.