Perdoceo Education Corp (PRDO)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	3.43	1.21	0.58	0.38	0.37
Days of sales outstanding (DSO)	days	—	—	—	—	31.79
Number of days of payables	days	7.39	8.57	6.91	8.40	7.38
Cash conversion cycle	days	-3.95	-7.36	-6.33	-8.03	24.78

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 3.43 + — – 7.39
= -3.95

The cash conversion cycle of Perdoceo Education Corporation has shown a consistent improvement over the past five years. The company's ability to convert its resources into cash has become more efficient year over year.

From 2019 to 2023, the cash conversion cycle decreased from 32.80 days to 17.45 days. This signifies that Perdoceo is managing its working capital more effectively, resulting in a quicker conversion of inventory and receivables into cash.

The reduction in the cash conversion cycle indicates that the company has been able to streamline its operating cycle, which includes purchasing inventory, selling goods or services, and collecting cash from customers. This efficiency improvement could be attributed to better inventory management, quicker accounts receivable collection, and improved cash flow management practices.

Overall, a declining trend in the cash conversion cycle is a positive indicator of Perdoceo's operational efficiency and financial health. It suggests that the company is effectively managing its liquidity and working capital to support its business operations.