NVIDIA Corporation (NVDA)

Cash conversion cycle

		Jan 31, 2025	Oct 31, 2024	Jul 31, 2024	Apr 30, 2024	Jan 31, 2024	Jan 28, 2024	Oct 31, 2023	Oct 29, 2023	Jul 31, 2023	Jul 30, 2023	Apr 30, 2023	Jan 31, 2023	Jan 29, 2023	Oct 31, 2022	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Apr 30, 2022	Jan 31, 2022	Jan 30, 2022
Days of inventory on hand (DOH)	days	112.73	102.18	102.68	102.01	96.09	102.57	99.51	113.61	122.66	142.99	172.90	189.36	163.53	133.76	132.64	116.86	104.94	108.74	94.59	98.02
Days of sales outstanding (DSO)	days	—	—	—	—	—	50.80	—	57.96	—	78.63	—	—	56.74	—	61.33	—	—	—	—	61.14
Number of days of payables	days	—	—	—	—	—	52.41	—	56.58	—	63.86	—	—	37.82	—	44.40	—	66.32	—	—	67.09
Cash conversion cycle	days	112.73	102.18	102.68	102.01	96.09	100.95	99.51	114.99	122.66	157.75	172.90	189.36	182.46	133.76	149.56	116.86	38.62	108.74	94.59	92.07

January 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 112.73 + — – —
= 112.73

The cash conversion cycle of NVIDIA Corporation has shown fluctuations over the periods analyzed. It measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales. From January 30, 2022, to January 31, 2025, the cash conversion cycle ranged from a low of 38.62 days to a high of 189.36 days.

During the early periods, the company had relatively shorter cash conversion cycles, indicating efficient management of its working capital and quick turnover of inventory. However, as we progress into later periods, the cash conversion cycle increased significantly, peaking at 189.36 days in January 31, 2023. This suggests that the company may have faced challenges in converting its investments into cash, possibly due to slower inventory turnover or longer accounts receivable collection periods.

Subsequently, the cash conversion cycle improved in the following periods, showing a decreasing trend. By January 31, 2025, the cycle stood at 112.73 days, indicating enhanced efficiency in managing working capital and cash flows.

Overall, fluctuations in NVIDIA Corporation's cash conversion cycle suggest varying efficiency in managing its operations and cash flow processes over the analyzed periods. Monitoring and managing the cash conversion cycle effectively are crucial for optimizing working capital and overall financial performance.