Paycom Soft (PAYC)
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 | 1.27 | 1.23 | 1.38 | 2.04 | 1.83 | 1.17 | 1.29 | 1.41 | 2.76 | 2.68 | 3.20 | 1.53 | 2.55 | 2.13 | 2.36 | 3.06 | 3.40 | 2.83 | 4.38 | 3.07 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 1.27 | 1.23 | 1.38 | 2.04 | 1.83 | 1.17 | 1.29 | 1.41 | 2.76 | 2.68 | 3.20 | 1.53 | 2.55 | 2.13 | 2.36 | 3.06 | 3.40 | 2.83 | 4.38 | 3.07 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 1.27 + — – —
= 1.27
The Cash Conversion Cycle of Paycom Soft 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, and then back into cash again through collections from customers.
From March 31, 2020, to June 30, 2020, the cash conversion cycle increased from 3.07 days to 4.38 days, indicating a longer period to convert investments into cash. However, the cycle decreased to 2.13 days by September 30, 2021, showing improved efficiency in managing working capital.
There were fluctuations observed in the following quarters, with the cycle hitting its lowest point of 1.17 days on September 30, 2023, suggesting a more efficient cash flow management strategy. It slightly increased to 2.04 days on March 31, 2024, but remained relatively low compared to previous periods.
Overall, the trend in the cash conversion cycle indicates that Paycom Soft has been effectively managing its working capital and improving its ability to convert investments into cash. Lower values of the cycle imply quicker turnover of cash, which is a positive sign for the company's financial health and operational efficiency.
Peer comparison
Dec 31, 2024