SolarWinds Corp (SWI)

Cash conversion cycle

		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	Sep 30, 2019
Days of inventory on hand (DOH)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Days of sales outstanding (DSO)	days	41.75	48.92	49.69	44.87	42.01	54.43	50.97	47.70	43.04	50.54	48.87	42.86	51.78	60.36	59.36	55.77	46.12	50.56	48.16	41.46
Number of days of payables	days	6.85	6.74	6.79	6.03	4.72	2.19	3.44	2.60	2.77	8.75	11.78	22.08	17.20	32.68	21.39	21.26	17.32	16.01	19.71	14.98
Cash conversion cycle	days	34.90	42.18	42.90	38.84	37.28	52.24	47.53	45.10	40.27	41.79	37.08	20.78	34.58	27.68	37.97	34.51	28.81	34.55	28.45	26.49

June 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 41.75 – 6.85
= 34.90

The cash conversion cycle of SolarWinds Corp has exhibited fluctuations over the past several quarters. The trend shows that the company's efficiency in converting its resources into cash has varied over time. In general, a shorter cash conversion cycle indicates a more efficient use of working capital and better liquidity management.

Looking at the data, we observe that the company's cash conversion cycle ranged from 20.78 days to 52.24 days over the past eight quarters. The highest cash conversion cycle was observed in Q1 2023 at 52.24 days, indicating that it took longer for SolarWinds Corp to convert its investments in inventory and accounts receivable into cash during that period. Conversely, the lowest cash conversion cycle of 20.78 days in Q4 2021 suggests that the company was able to realize cash from its operating cycle more quickly during that quarter.

Overall, SolarWinds Corp's cash conversion cycle has shown fluctuations, which could be influenced by various factors such as changes in inventory management, accounts receivable collection efficiency, and payment practices. It is important for the company to focus on optimizing its cash conversion cycle to improve liquidity, operational efficiency, and overall financial health.