Progress Software Corporation (PRGS)

Cash conversion cycle

		Nov 30, 2024	Nov 30, 2023	Nov 30, 2022	Nov 30, 2021	Nov 30, 2020
Days of inventory on hand (DOH)	days	—	—	19.48	16.52	—
Days of sales outstanding (DSO)	days	79.25	66.13	59.32	68.57	69.38
Number of days of payables	days	38.91	35.67	35.85	45.05	58.63
Cash conversion cycle	days	40.34	30.46	42.94	40.04	10.74

November 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 79.25 – 38.91
= 40.34

According to the data provided, the cash conversion cycle for Progress Software Corporation has fluctuated over the years.

As of November 30, 2020, the company had a relatively efficient cash conversion cycle of 10.74 days, indicating that it was able to quickly convert its investments in inventory and accounts receivable into cash.

However, there was a significant increase in the cash conversion cycle to 40.04 days by November 30, 2021, and further to 42.94 days by November 30, 2022. These longer cycles suggest that Progress Software Corporation took longer to convert its investments into cash during these periods.

The trend changed slightly by November 30, 2023, with a decrease in the cash conversion cycle to 30.46 days. This improvement indicates that the company was able to manage its working capital more efficiently and convert its assets into cash at a quicker pace.

By November 30, 2024, the cash conversion cycle increased again to 40.34 days, albeit not as high as in 2022. This suggests that Progress Software Corporation faced challenges in optimizing its cash flow efficiency during that year.

Overall, the fluctuations in the cash conversion cycle of Progress Software Corporation indicate changes in the company's ability to efficiently manage its working capital and convert investments into cash over the years. It would be beneficial for the company to focus on strategies to shorten the cycle and improve cash flow management in the future.