Progress Software Corporation (PRGS)

Cash conversion cycle

		Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020	Feb 29, 2020	Nov 30, 2019	Aug 31, 2019	May 31, 2019
Days of inventory on hand (DOH)	days	—	—	—	—	—	19.48	18.40	11.49	13.83	16.52	—	—	—	—	—	—	—	—	—	—
Days of sales outstanding (DSO)	days	45.34	66.13	53.96	48.89	54.84	59.32	51.32	40.65	56.96	68.57	54.75	49.13	62.40	69.38	50.52	45.88	52.37	64.31	58.88	49.55
Number of days of payables	days	27.19	35.67	27.36	24.36	39.17	35.85	30.60	40.99	35.08	45.05	32.19	59.00	56.55	58.63	35.98	45.49	50.32	51.44	35.28	51.92
Cash conversion cycle	days	18.15	30.46	26.60	24.54	15.67	42.94	39.12	11.16	35.71	40.04	22.56	-9.87	5.85	10.74	14.55	0.39	2.04	12.87	23.60	-2.37

February 29, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 45.34 – 27.19
= 18.15

Progress Software Corporation's cash conversion cycle has exhibited fluctuations over the past few periods. The company's cash conversion cycle, which represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, ranged from negative cycles to positive cycles.

In the most recent period, as of February 29, 2024, the cash conversion cycle was 18.15 days, indicating that on average, it takes Progress Software Corporation 18.15 days to convert its investments in inventory into cash from sales. This represents an improvement compared to the previous period of November 30, 2023, where the cycle was 30.46 days.

The company experienced varied cash conversion cycle performances in the preceding periods, with the cycle ranging from 42.94 days on August 31, 2022, to -9.87 days on May 31, 2021. A negative cash conversion cycle indicates that the company is receiving cash from customers before paying its suppliers, which can be a favorable position from a liquidity perspective.

Overall, the fluctuations in Progress Software Corporation's cash conversion cycle suggest varying efficiencies in managing its working capital, inventory, and accounts receivable. Further analysis and trend monitoring are recommended to understand the underlying reasons for these fluctuations and assess the company's effectiveness in managing its cash conversion cycle.