PTC Inc (PTC)

Cash conversion cycle

		Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Days of inventory on hand (DOH)	days	—	—	—	34.24	—	—	—	—	—	—	—	—	—	—	—	26.46	25.15	26.88	24.61	25.69
Days of sales outstanding (DSO)	days	140.89	116.29	122.25	121.50	150.13	119.30	126.39	110.94	125.98	93.34	102.07	98.14	112.65	94.59	100.37	104.09	109.46	87.79	100.65	102.20
Number of days of payables	days	6.89	13.43	5.52	4.00	12.57	5.55	11.64	12.71	12.67	6.81	9.95	13.35	14.24	7.72	7.72	10.90	9.02	11.09	12.41	15.51
Cash conversion cycle	days	134.00	102.86	116.73	151.74	137.56	113.75	114.75	98.22	113.31	86.53	92.12	84.78	98.41	86.87	92.65	119.66	125.58	103.58	112.84	112.39

September 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 140.89 – 6.89
= 134.00

The cash conversion cycle of PTC Inc has fluctuated over the past several quarters, indicating varying efficiency in managing its working capital. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Looking at the data, we observe that the cash conversion cycle peaked at 151.74 days in December 2023, suggesting a significant delay in the company's ability to collect cash from its sales and convert it back into cash after paying off its liabilities. This extended cycle may indicate issues with inventory management, sales collection, or payment to suppliers during that period.

In contrast, the lowest cash conversion cycle of 84.78 days in March 2022 suggests improved efficiency and quicker conversion of assets into cash during that quarter. A shorter cash conversion cycle typically signifies that the company is efficiently managing its working capital and generating cash flows.

Overall, PTC Inc's cash conversion cycle has shown variability, with some quarters indicating potential areas for improvement in working capital management, while others demonstrate better efficiency. Analyzing trends in the cash conversion cycle can provide insight into the company's liquidity, operational efficiency, and overall financial health.