NVIDIA Corporation (NVDA)

Cash conversion cycle

Jan 28, 2024 Jan 29, 2023 Jan 30, 2022 Jan 31, 2021 Jan 26, 2020
Days of inventory on hand (DOH) days 115.99 162.08 100.73 106.15 86.10
Days of sales outstanding (DSO) days 59.91 51.79 63.06 53.17 55.40
Number of days of payables days 59.27 37.48 68.95 66.79 60.42
Cash conversion cycle days 116.63 176.38 94.85 92.52 81.08

January 28, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 115.99 + 59.91 – 59.27
= 116.63

The cash conversion cycle of NVIDIA Corp has shown fluctuations over the past five years. In January 2024, the cash conversion cycle decreased to 116.63 days from 176.38 days in January 2023, indicating an improvement in the efficiency of cash management. However, compared to January 2022 and January 2021, where the cash conversion cycle was 94.85 days and 89.50 days respectively, there was an increase in the cycle length, suggesting potential delays in converting inventory and receivables into cash.

In general, a shorter cash conversion cycle is favorable as it signifies quicker turnover of cash invested in the operating cycle of the business. It is important for NVIDIA Corp to focus on streamlining its processes related to inventory management, accounts receivable collection, and accounts payable to further reduce the cash conversion cycle and enhance overall liquidity and cash flow management.


Peer comparison

Jan 28, 2024


See also:

NVIDIA Corporation Cash Conversion Cycle