Teradata Corp (TDC)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 9.49 | 6.62 | 4.09 | 12.98 | 12.96 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 9.49 | 6.62 | 4.09 | 12.98 | 12.96 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 9.49 + — – —
= 9.49
The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. In the case of Teradata Corp, the trend in the cash conversion cycle from 2020 to 2024 shows some fluctuation.
As of December 31, 2020, the company had a cash conversion cycle of 12.96 days, indicating that it took approximately 12.96 days for Teradata to convert its investments into cash flows.
By December 31, 2021, the cash conversion cycle remained relatively stable at 12.98 days, suggesting that the company managed its inventory and cash flow processes consistently.
The cash conversion cycle then significantly decreased to 4.09 days by December 31, 2022, implying that Teradata was able to convert its investments into cash more efficiently in that year.
However, by December 31, 2023, the cash conversion cycle increased to 6.62 days, indicating a slight slowdown in the company's cash conversion efficiency compared to the previous year.
By December 31, 2024, the cash conversion cycle further increased to 9.49 days, suggesting a prolonged time for Teradata to convert its investments into cash flows.
Overall, the fluctuation in Teradata's cash conversion cycle over the years may indicate varying levels of efficiency in managing working capital, inventory, and accounts receivable. The company may need to further analyze its operational processes to maintain optimal cash conversion efficiency in the future.
Peer comparison
Dec 31, 2024