Paycom Soft (PAYC)
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 | 1.53 | 1.83 | 2.76 | 2.55 | 3.40 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 1.53 | 1.83 | 2.76 | 2.55 | 3.40 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 1.53 + — – —
= 1.53
The cash conversion cycle of Paycom Soft has shown a decreasing trend over the years, indicating an improvement in managing its working capital efficiently. From 3.40 days in December 31, 2020, the cycle decreased to 1.53 days by December 31, 2024. This suggests that the company is able to convert its investments in inventory and accounts receivable into cash more quickly.
A lower cash conversion cycle means that Paycom Soft is able to collect cash from its customers, pay its suppliers, and manage its inventory effectively. The company's ability to streamline these processes can lead to improved cash flows and overall financial health. It is essential for a company to maintain an optimal cash conversion cycle to ensure liquidity and operational efficiency.
Peer comparison
Dec 31, 2024