Teradata Corp (TDC)

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	3.36	2.03	2.32	1.82	2.03	3.33	4.24	3.97	6.54	4.13	4.82	3.80	6.72	3.21	5.93	6.28	6.83	7.64	11.66	16.33
Days of sales outstanding (DSO)	days	53.30	52.75	49.65	65.03	71.06	46.88	48.23	58.05	59.77	51.28	53.26	67.25	63.66	61.99	65.50	86.70	78.04	60.07	89.94	101.71
Number of days of payables	days	25.87	26.87	29.09	23.99	23.88	20.21	20.68	19.34	16.84	25.29	21.95	13.06	11.59	13.52	14.13	21.52	14.55	21.86	33.97	31.10
Cash conversion cycle	days	30.79	27.91	22.88	42.87	49.21	29.99	31.79	42.67	49.46	30.13	36.13	57.98	58.79	51.68	57.30	71.46	70.32	45.85	67.62	86.94

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 3.36 + 53.30 – 25.87
= 30.79

The cash conversion cycle of Teradata Corp has varied over the past eight quarters. In Q1 2022, the company had a cash conversion cycle of 32.17 days, indicating that it took 32.17 days on average to convert its investments in inventory and other resources into cash inflows. Subsequently, the company saw improvements in its cash conversion cycle in Q2 and Q3 of 2022, reducing the cycle to 19.31 days and 16.67 days, respectively.

However, in Q4 2022, the cash conversion cycle increased significantly to 32.70 days, suggesting a longer time to convert investments into cash. This trend continued into Q1 2023, with a cash conversion cycle of 25.35 days.

Interestingly, in Q2 2023, the company managed to achieve a negative cash conversion cycle of -0.16 days, indicating that it was able to generate cash before paying for its investments in resources. This improved efficiency was followed by a relatively lower but still positive cash conversion cycle of 7.97 days in Q3 2023.

Overall, the fluctuation in Teradata Corp's cash conversion cycle over the quarters suggests varying levels of efficiency in managing its working capital and converting investments into cash inflows. It is crucial for the company to focus on optimizing its cash conversion cycle to enhance liquidity and operational performance.