TechTarget Inc (TTGT)
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 | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 58.07 | 73.84 | 77.66 | 99.06 | 74.23 |
| Number of days of payables | days | 8.51 | 5.13 | 6.31 | 13.34 | 7.21 |
| Cash conversion cycle | days | 49.56 | 68.71 | 71.34 | 85.72 | 67.02 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 58.07 – 8.51
= 49.56
The cash conversion cycle measures the time it takes for a company like Techtarget Inc. to convert its investments in raw materials, inventory, and other inputs into cash flows from sales. A lower cash conversion cycle is generally favorable as it indicates that the company is able to convert its investments into cash more quickly.
Looking at the trend for Techtarget Inc. over the last five years, we see fluctuations in the cash conversion cycle. In 2023, the cash conversion cycle decreased significantly to 35.64 days from 58.16 days in 2022. This decrease suggests an improvement in the company's efficiency in managing its working capital.
Comparing 2023 to previous years, Techtarget Inc. has shown variability in its cash conversion cycle performance. The cycle was shorter in 2023 compared to both 2020 and 2019, indicating that the company is managing its working capital more effectively in recent years. However, 2023's cycle was slightly longer than in 2021, suggesting that there may have been some challenges in converting investments into cash during that year.
Overall, Techtarget Inc. has shown improvement in its cash conversion cycle in 2023, demonstrating more efficient management of working capital and an ability to convert investments into cash more quickly. Additional analysis of the company's operations and financial performance would provide further insights into the factors driving these changes.
Peer comparison
Dec 31, 2023