SPS Commerce Inc (SPSC)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | 125.80 | 123.43 | 137.11 | 139.58 |
| Days of sales outstanding (DSO) | days | 31.84 | 31.92 | 32.74 | 39.20 | 41.23 |
| Number of days of payables | days | 14.88 | 26.84 | 23.09 | 19.57 | 16.91 |
| Cash conversion cycle | days | 16.97 | 130.88 | 133.08 | 156.74 | 163.90 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 31.84 – 14.88
= 16.97
The cash conversion cycle of SPS Commerce Inc. has fluctuated over the past five years. In 2023, the company's cash conversion cycle was 16.97 days, showing an increase compared to the previous year's cycle of 5.08 days. This substantial increase could indicate potential challenges in managing the company's cash flow efficiency in 2023.
In 2021, the cash conversion cycle was 9.65 days, which was an improvement from 19.63 days in 2020. This suggests that the company was able to manage its cash flow more effectively in 2021.
In 2019, the cash conversion cycle was at its highest point, reaching 24.32 days. Since then, the company has made progress in reducing this cycle, as seen in the subsequent years.
Overall, fluctuations in the cash conversion cycle can reflect changes in the company's management of working capital, inventory turnover, and receivables collection efficiency. It is important for SPS Commerce Inc. to closely monitor and improve its cash conversion cycle to optimize its operational and financial performance.
Peer comparison
Dec 31, 2023