VeriSign Inc (VRSN)

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	—	—	—	—	—	100.44	—	93.86	—	107.80	107.38	93.50	—	90.13	95.33	78.64	—	87.66	—	—
Days of sales outstanding (DSO)	days	1.54	1.13	1.72	—	1.59	3.37	2.82	1.81	1.45	2.55	2.77	1.81	1.34	1.85	1.56	1.49	4.81	2.42	2.95	3.19
Number of days of payables	days	23.12	17.22	13.82	12.05	17.82	14.45	16.46	13.81	17.11	12.06	23.06	22.61	25.00	21.15	30.33	21.10	32.17	9.70	15.72	13.54
Cash conversion cycle	days	-21.58	-16.08	-12.10	-12.05	-16.23	89.36	-13.65	81.86	-15.66	98.30	87.08	72.70	-23.66	70.83	66.57	59.03	-27.36	80.37	-12.77	-10.34

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 1.54 – 23.12
= -21.58

Verisign Inc.'s cash conversion cycle has exhibited fluctuations over the past eight quarters. 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 Q1 2023, the company achieved a cash conversion cycle of 0.00 days, indicating that it effectively converted its investments into cash instantly, a highly efficient performance. However, this was followed by an increase in the cash conversion cycle to 1.72 days in Q2 2023, indicating a slight delay in the conversion process.

The company managed to improve its efficiency in Q3 2023 with a cash conversion cycle of 1.13 days, demonstrating a quicker turnaround in converting resources to cash. Nevertheless, in Q4 2023, the cash conversion cycle increased to 3.32 days, which suggests a potential slowdown in the conversion process compared to the previous quarter.

Overall, Verisign Inc. should strive to maintain a low cash conversion cycle to optimize its cash flows and operational efficiency. Management should closely monitor the cycle and identify areas for improvement to ensure a timely and effective conversion of resources into cash.