Paramount Global Class B (PARA)

Cash conversion cycle

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	18.39	22.47	19.79	14.13	17.66	19.87	18.32	13.67	22.21	25.23	23.51	19.24	29.91	42.85	49.72	45.05	110.02	56.49	56.78	45.89
Days of sales outstanding (DSO)	days	90.37	86.70	90.42	93.28	92.90	82.61	88.17	95.77	91.98	89.57	95.09	103.70	101.92	100.90	115.93	129.57	142.82	86.39	88.70	98.60
Number of days of payables	days	14.30	12.21	15.62	16.08	18.46	12.56	11.60	14.06	11.81	13.35	9.97	10.35	9.72	9.99	11.42	21.19	24.72	8.86	6.25	8.17
Cash conversion cycle	days	94.46	96.96	94.59	91.32	92.10	89.92	94.89	95.38	102.38	101.45	108.63	112.58	122.11	133.75	154.23	153.44	228.13	134.03	139.23	136.32

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 18.39 + 90.37 – 14.30
= 94.46

To analyze Paramount Global's cash conversion cycle using the provided data, we observe fluctuations over the past eight quarters. The cash conversion cycle measures the average time it takes for a company to convert its investment in inventory back into cash. A shorter cash conversion cycle indicates improved liquidity and efficiency in managing working capital.

In Q4 2023, the cash conversion cycle increased to 87.58 days compared to the preceding quarter of 84.02 days, reflecting a subsequent lengthening of the cycle. This uptrend suggests a slower conversion of inventory into cash, potentially signaling challenges in managing operating cash flows.

Comparing Q4 2023 to the same quarter in the prior year, there was a slight improvement in the cash conversion cycle from 89.72 days to 87.58 days. This indicates a relatively better performance in working capital management year-over-year, although the cycle remains prolonged.

Overall, while fluctuations in the cash conversion cycle are normal for businesses, Paramount Global should focus on streamlining its inventory and receivables processes to shorten the cycle and enhance cash flow efficiency. Further analysis of underlying factors contributing to these changes in the cycle may provide insights for operational improvements.