Palantir Technologies Inc. Class A Common Stock (PLTR)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	—	14.51	39.39	38.60
Days of sales outstanding (DSO)	days	59.84	49.48	45.20	52.42
Number of days of payables	days	10.26	40.01	80.56	16.94
Cash conversion cycle	days	49.58	23.98	4.03	74.09

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 59.84 – 10.26
= 49.58

The cash conversion cycle of Palantir Technologies Inc. Class A Common Stock has varied significantly over the past four years. In December 2020, the company had a cash conversion cycle of 74.09 days, indicating a longer period to convert its investments in inventory and accounts receivable into cash. By December 2021, the cash conversion cycle drastically improved to 4.03 days, showing a more efficient management of working capital. However, in December 2022, the cycle increased to 23.98 days, suggesting a slight deterioration in the efficiency of the company's cash conversion process.

The most recent data for December 2023 shows a further increase in the cash conversion cycle to 49.58 days, indicating a significant elongation in the time taken for Palantir Technologies Inc. to convert its resources into cash. This result may raise concerns about potential liquidity issues or inefficiencies in the company's operations. It would be advisable for stakeholders to closely monitor the trend of the cash conversion cycle to assess the company's effectiveness in managing its working capital and its overall financial health.