Progress Software Corporation (PRGS)

Cash conversion cycle

		Nov 30, 2023	Nov 30, 2022	Nov 30, 2021	Nov 30, 2020	Nov 30, 2019
Days of inventory on hand (DOH)	days	—	19.48	16.52	—	—
Days of sales outstanding (DSO)	days	66.13	59.32	68.57	69.38	64.31
Number of days of payables	days	35.67	35.85	45.05	58.63	51.44
Cash conversion cycle	days	30.46	42.94	40.04	10.74	12.87

November 30, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 66.13 – 35.67
= 30.46

The cash conversion cycle (CCC) of Progress Software Corp. has exhibited some fluctuations over the past five years.

In 2019, the company had a negative CCC of -4.49 days, indicating that it was able to convert its inventory into cash before having to pay its suppliers, a favorable position. However, this improved significantly from 2020 to 2022, with the CCC ranging from 22.77 to 30.66 days, suggesting an increased time required to convert inventory to sales and then to cash.

By 2023, Progress Software Corp.'s CCC had increased further to 35.05 days, signifying a longer time to convert its investments in inventory and receivables into cash. This could potentially lead to a strain on working capital and liquidity.

Overall, the increasing trend in the cash conversion cycle over the last three years may warrant closer attention to the company's working capital management and inventory turnover efficiency.