Ziff Davis Inc (ZD)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 172.08 | 125.07 | 120.82 | 119.42 | 90.37 | 77.61 | 76.08 | 73.30 | 79.96 | 60.44 | 62.71 | 67.77 | 81.50 | 70.36 | 69.38 | 72.58 | 102.56 | 59.62 | 54.94 | 56.47 |
| Number of days of payables | days | 299.46 | 672.89 | 658.88 | 661.82 | 228.03 | 233.82 | 236.05 | 269.22 | 225.53 | — | — | — | 254.22 | — | — | — | — | — | — | — |
| Cash conversion cycle | days | -127.38 | -547.81 | -538.06 | -542.39 | -137.66 | -156.21 | -159.97 | -195.92 | -145.56 | 60.44 | 62.71 | 67.77 | -172.72 | 70.36 | 69.38 | 72.58 | 102.56 | 59.62 | 54.94 | 56.47 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 172.08 – 299.46
= -127.38
The cash conversion cycle of Ziff Davis Inc has shown fluctuations over the years, reflecting the efficiency of the company in managing its working capital. The cash conversion cycle, which indicates how long it takes for a company to convert its investments in inventory and other resources back into cash, is an important metric to assess liquidity and operational effectiveness.
From March 31, 2020, to June 30, 2021, the cash conversion cycle of Ziff Davis Inc ranged between approximately 55 to 73 days, indicating a relatively stable working capital management during this period. However, there was a significant spike in the cycle by December 31, 2021, reaching -173 days, suggesting an unusual situation where the company may have been converting its investments back into cash much faster than average.
Subsequently, from March 31, 2022, to September 30, 2024, the cash conversion cycle continued to fluctuate in negative territory, reaching its lowest point of -542 days by March 31, 2024. This suggests that the company may have been overly efficient in managing its working capital, potentially indicating aggressive inventory management or delayed payments to suppliers.
Overall, while a negative cash conversion cycle may imply strong liquidity and efficient working capital management, extreme negative values may also point to potential risks such as inadequate inventory levels or excessively lenient payment terms to suppliers. Ziff Davis Inc should continue to monitor its cash conversion cycle and ensure a balance between optimizing working capital efficiency and maintaining healthy operations.