Ziff Davis Inc (ZD)
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 | — | — | 8.98 | — | — |
| Days of sales outstanding (DSO) | days | 90.37 | 79.96 | 81.50 | 102.56 | 91.01 |
| Number of days of payables | days | 228.03 | 225.53 | 254.22 | — | — |
| Cash conversion cycle | days | -137.66 | -145.56 | -163.74 | 102.56 | 91.01 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 90.37 – 228.03
= -137.66
The cash conversion cycle for Ziff Davis Inc has exhibited varying trends over the past five years. In 2023, the company's cash conversion cycle improved significantly to -137.66 days, indicating that Ziff Davis is efficiently managing its cash flow and working capital. This is a positive sign as a shorter cash conversion cycle indicates that the company is able to collect cash from customers quickly after making sales and pay off its creditors later.
In contrast, in 2022, the cash conversion cycle was slightly longer at -145.56 days, indicating a small decrease in efficiency compared to the previous year. However, this relatively shorter cycle still suggests that the company is effectively managing its cash flow.
The data for 2021 shows a significant increase in the cash conversion cycle to 81.50 days, which could indicate potential issues with managing accounts receivable, inventory, or accounts payable. It is worth investigating the reasons behind this increase and implementing strategies to streamline working capital management.
Similarly, in 2020 and 2019, the cash conversion cycle was 79.79 days and 69.68 days, respectively. These figures suggest that Ziff Davis Inc has historically maintained a relatively efficient cash conversion cycle, indicating good cash flow management practices.
Overall, while there have been fluctuations in the cash conversion cycle over the years, Ziff Davis Inc's ability to efficiently convert its investments in inventory and accounts receivable into cash appears to have improved in 2023, which is a positive trend for the company's financial health.