Xerox Corp (XRX)
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 | 117.46 | 143.30 | 128.43 | 137.79 | 99.65 |
| Days of sales outstanding (DSO) | days | 44.10 | 43.14 | 93.05 | 98.74 | 92.47 |
| Number of days of payables | days | 185.52 | 239.32 | 197.26 | 160.68 | 151.20 |
| Cash conversion cycle | days | -23.96 | -52.88 | 24.22 | 75.85 | 40.92 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 117.46 + 44.10 – 185.52
= -23.96
The cash conversion cycle of Xerox Holdings Corp has exhibited fluctuations over the past five years. In 2023, the company's cash conversion cycle stands at 62.67 days, showing a slight improvement compared to 63.03 days in 2022. This suggests that Xerox has become more efficient in managing its working capital in the current year.
However, there was a substantial decrease in the cash conversion cycle from 2021 to 2022, indicating a significant improvement in the company's ability to convert its investments in inventory and receivables into cash. The cash conversion cycle was considerably higher in 2021 at 172.11 days, highlighting potential inefficiencies in the company's working capital management during that year.
Similarly, in 2020, the cash conversion cycle was 96.84 days, implying a shorter time period to convert its resources into cash compared to 2021, but still higher than 2023 and 2022. In 2019, the cash conversion cycle was 160.97 days, which was higher than 2020 and 2023, indicating that the company has improved its efficiency in cash conversion over the years.
Overall, Xerox Holdings Corp has shown a trend of reducing its cash conversion cycle in recent years, suggesting enhanced operational efficiency in converting its resources into cash, which is a positive indicator for the company's working capital management.
Peer comparison
Dec 31, 2023