Schrodinger Inc (SDGR)

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
Days of inventory on hand (DOH)	days	—	—	—	—	—	—	—	—	—	—	—	—	—
Days of sales outstanding (DSO)	days	111.17	36.40	18.18	86.48	112.86	50.55	41.99	69.28	84.00	33.20	64.57	36.07	106.10
Number of days of payables	days	80.78	48.57	57.87	55.85	43.24	48.83	23.85	46.28	40.78	45.13	37.29	52.67	68.69
Cash conversion cycle	days	30.39	-12.17	-39.69	30.63	69.62	1.72	18.14	23.01	43.22	-11.93	27.28	-16.60	37.41

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 111.17 – 80.78
= 30.39

The cash conversion cycle of Schrodinger Inc has shown fluctuations over the past eight quarters. In Q4 2023, the company had a cash conversion cycle of 69.34 days, indicating a longer time period between the company's cash outflows for production and cash inflows from sales. This could suggest inefficiencies in managing inventory, accounts receivable, and accounts payable.

The previous quarter, Q3 2023, saw a significant improvement in the cash conversion cycle to 10.26 days, possibly due to better management of working capital and faster turnover of assets. However, the negative cash conversion cycle in Q2 2023 (-12.22 days) is unusual and may indicate a potential issue with the accuracy of the data or calculation methodology.

Comparing the recent quarters to earlier periods, it is evident that the company has experienced varying levels of efficiency in converting its resources into cash. Q4 2022 had a higher cash conversion cycle of 96.12 days, reflecting a longer cash cycle duration and potentially slower cash flow operations.

Overall, Schrodinger Inc should strive to consistently monitor and improve its cash conversion cycle to optimize working capital management and enhance overall financial performance and liquidity.