Qualys Inc (QLYS)

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	—	5.06	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Days of sales outstanding (DSO)	days	96.26	69.81	86.96	73.28	90.78	76.88	79.59	76.18	96.76	77.63	81.72	83.29	100.74	66.51	80.94	79.80	88.56	71.93	76.84	85.60
Number of days of payables	days	3.36	3.93	7.34	6.01	9.97	4.83	8.17	9.85	5.29	4.61	6.85	5.16	3.37	10.79	7.11	3.39	4.45	4.75	5.07	3.04
Cash conversion cycle	days	92.91	70.95	79.62	67.27	80.80	72.05	71.42	66.33	91.47	73.02	74.86	78.14	97.37	55.71	73.84	76.40	84.11	67.18	71.77	82.57

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 96.26 – 3.36
= 92.91

The cash conversion cycle for Qualys Inc fluctuated over the past eight quarters, ranging from a low of 65.88 days in Q3 2023 to a high of 92.91 days in Q4 2023. This metric indicates the average number of days it takes the company to convert its investments in inventory and other resources into cash flows from sales and then back into cash through the collection of accounts receivable.

A lower cash conversion cycle is generally favorable as it signifies that the company is efficient in managing its working capital and can quickly convert its investments into cash. Conversely, a higher cash conversion cycle may indicate inefficiencies in the company's operations and could potentially lead to liquidity challenges.

In the case of Qualys Inc, the trend of the cash conversion cycle shows some variability, with periods of improvement followed by slight increases. This suggests that the company may have areas where it can enhance its working capital management to improve efficiency and liquidity. Further analysis of the underlying components impacting the cash conversion cycle, such as inventory turnover, accounts receivable collection period, and accounts payable payment period, could provide more insights into specific areas for improvement.