Insperity Inc (NSP)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Days of inventory on hand (DOH)	days	—	—	—	113.18	77.20	88.34	86.50	126.34	80.16	112.24	150.62	107.77	93.61	112.26	112.08	193.99	102.27	146.91	123.61	163.87
Days of sales outstanding (DSO)	days	45.98	—	—	—	39.22	—	0.68	36.27	38.37	35.59	45.50	46.54	37.73	44.71	48.02	47.23	33.50	44.88	39.91	43.34
Number of days of payables	days	10.34	6.47	7.87	6.93	13.18	8.78	8.32	12.14	10.08	7.46	8.55	11.69	10.31	7.07	7.20	10.89	11.39	11.04	5.19	10.89
Cash conversion cycle	days	35.64	-6.47	-7.87	106.25	103.24	79.56	78.85	150.47	108.45	140.37	187.56	142.62	121.03	149.90	152.90	230.33	124.38	180.75	158.33	196.32

December 31, 2024 calculation

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

The cash conversion cycle of Insperity Inc fluctuated significantly over the analyzed period. It started at a relatively high level of 196.32 days as of March 31, 2020, indicating that it took the company over six months to convert its investments in inventory and accounts receivable into cash.

Over the next few quarters, the cash conversion cycle decreased to 124.38 days by December 31, 2020, which suggested an improvement in the company's efficiency in managing its working capital. However, there was a subsequent increase in the cycle to 230.33 days by March 31, 2021, indicating potential liquidity challenges.

From that point on, the cash conversion cycle fluctuated, showing periods of both improvement and deterioration. Notably, by June 30, 2024, it turned negative, reaching -7.87 days, and continued to be negative until September 30, 2024, indicating that the company was managing its working capital exceptionally well during this period.

Overall, the cash conversion cycle analysis highlights the importance of managing working capital efficiently to ensure the company's liquidity and operational effectiveness. Insperity Inc demonstrated varying levels of performance in this aspect throughout the analyzed period, with notable improvements and challenges along the way.