Perficient Inc (PRFT)

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	—	3.46	3.24	3.52	3.35	3.45	3.85	3.43	3.29	4.32	4.28	4.57	4.06	4.60	4.31	4.97	3.63	4.79	4.10	4.52
Days of sales outstanding (DSO)	days	72.07	73.57	73.62	73.25	81.59	79.36	84.22	83.62	85.21	85.02	81.64	80.24	79.92	84.72	80.25	80.13	83.33	83.51	84.36	82.17
Number of days of payables	days	9.45	7.74	8.23	7.49	12.69	10.20	11.30	12.72	15.90	12.34	17.61	11.41	18.64	12.27	12.22	11.87	18.03	11.49	13.06	10.75
Cash conversion cycle	days	62.62	69.29	68.63	69.28	72.25	72.62	76.78	74.33	72.61	77.00	68.30	73.40	65.34	77.05	72.35	73.23	68.93	76.80	75.40	75.93

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 72.07 – 9.45
= 62.62

The cash conversion cycle measures the amount of time it takes for a company to convert its investments in inventory and other resources into cash inflows from sales. A shorter cash conversion cycle indicates that a company is more efficient in managing its working capital.

Based on the data provided for Perficient Inc., the cash conversion cycle has been relatively stable over the past eight quarters, ranging from a low of 60.20 days to a high of 70.72 days. Compared to the industry average, Perficient Inc.'s cash conversion cycle appears to be in line with expectations.

A cash conversion cycle of around 60-70 days suggests that Perficient Inc. takes approximately 2-3 months to convert its investments in inventory and other resources into cash inflows. This could indicate that the company's inventory turnover is not as high as some industry peers, leading to a longer cycle.

Overall, Perficient Inc. should continue to monitor and potentially optimize its cash conversion cycle to ensure efficient management of working capital and maximize cash flow generation.