Digital River (FRA:RIV) Cash Conversion Cycle : -752.95 (As of Sep. 2014)

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What is Digital River Cash Conversion Cycle?

Cash Conversion Cycle is one of several measures of management effectiveness. It equals Days Sales Outstanding + Days Inventory - Days Payable.

Digital River's Days Sales Outstanding for the three months ended in Sep. 2014 was 61.95.
Digital River's Days Inventory for the three months ended in Sep. 2014 was 0.
Digital River's Days Payable for the three months ended in Sep. 2014 was 814.9.
Therefore, Digital River's Cash Conversion Cycle (CCC) for the three months ended in Sep. 2014 was -752.95.

Digital River Cash Conversion Cycle Historical Data

The historical data trend for Digital River's Cash Conversion Cycle can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Digital River Cash Conversion Cycle Chart

Digital River Annual Data

Trend

Dec04

Dec05

Dec06

Dec07

Dec08

Dec09

Dec10

Dec11

Dec12

Dec13

Cash Conversion Cycle

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-1,073.26

-3,679.45

-5,028.67

-1,156.43

-928.75

Digital River Quarterly Data
	Dec09	Mar10	Jun10	Sep10	Dec10	Mar11	Jun11	Sep11	Dec11	Mar12	Jun12	Sep12	Dec12	Mar13	Jun13	Sep13	Dec13	Mar14	Jun14	Sep14
Cash Conversion Cycle	Get a 7-Day Free Trial															-705.19	-762.10	-833.65	-836.79	-752.95

Competitive Comparison of Digital River's Cash Conversion Cycle

For the Software - Application subindustry, Digital River's Cash Conversion Cycle, along with its competitors' market caps and Cash Conversion Cycle data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Digital River's Cash Conversion Cycle Distribution in the Software Industry

For the Software industry and Technology sector, Digital River's Cash Conversion Cycle distribution charts can be found below:

* The bar in red indicates where Digital River's Cash Conversion Cycle falls into.

Digital River Cash Conversion Cycle Calculation

Cash Conversion Cycle (CCC) measures how fast a company can convert cash on hand into even more cash on hand. This metric looks at the amount of time needed to sell inventory, the amount of time needed to collect receivables and the length of time the company is afforded to pay its bills without incurring penalties.

Cash Conversion Cycle is one of several measures of management effectiveness.

Digital River's Cash Conversion Cycle for the fiscal year that ended in Dec. 2013 is calculated as

Cash Conversion Cycle	=	Days Sales Outstanding	+	Days Inventory	-	Days Payable
	=	60.17	+	0	-	988.92
	=	-928.75

Digital River's Cash Conversion Cycle for the quarter that ended in Sep. 2014 is calculated as:

Cash Conversion Cycle	=	Days Sales Outstanding	+	Days Inventory	-	Days Payable
	=	61.95	+	0	-	814.9
	=	-752.95

Digital River (FRA:RIV) Cash Conversion Cycle Explanation

Generally, the lower this number is, the better for the company. Although it should be combined with other metrics (such as ROE % and ROA %), it can be especially useful for comparing close competitors, because the company with the lowest CCC is often the one with better management.

Be Aware

CCC is most effective with retail-type companies, which have inventories that are sold to customers. Consulting businesses, software companies and insurance companies are all examples of companies for whom this metric is meaningless.

The CCC is one of several tools that can help you evaluate management, especially if it is calculated for several consecutive time periods and for several competitors. Decreasing or steady CCCs are good, while rising ones should motivate you to dig a bit deeper.

Digital River Cash Conversion Cycle Related Terms

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Digital River (FRA:RIV) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Technology » Software » Digital River Inc (FRA:RIV) » Definitions » Cash Conversion Cycle

Traded in Other Exchanges

N/A

Address

Website

http://www.digitalriver.com

Digital River, Inc., was incorporated in Delaware in February 1994. The Company provides end-to-end e-commerce and marketing solutions to a variety of companies in software, consumer electronics, computer games, video games, and other markets. It offers its clients, services that enables them to quickly and cost effectively establish an online sales channel capability and to subsequently manage and grow online sales while mitigating risks. Its services include design, development and hosting of online stores and shopping carts, store merchandising and optimization, order management, denied parties screening, export controls and management, tax compliance and management, fraud management, digital product delivery via download, physical product fulfillment, subscription management, online marketing including e-mail marketing, management of affiliate programs, paid search programs, payment processing services, website optimization, web analytics and reporting, and CD production and delivery. Its products and services allow its clients to focus on promoting and marketing their products and brands while leveraging its investments in technology and infrastructure to facilitate the purchase of products through their online websites. Shoppers could browse for products and make purchases online. The Company typically is the seller of record for transactions through its client branded stores. It also processes the buyer's payment as the merchant of record, including collection and remittance of applicable taxes. The Company's e-commerce store solutions range from simple remote control models to more comprehensive online store models. In addition to the services the Company provides, that facilitate the completion of an online transaction, it also offers services designed to increase traffic to its clients' websites and the associated online stores and to improve the sales productivity of those stores. The Company's services include paid search advertising, search engine optimization affiliate marketing, store optimization, multi-variant testing, web analytic services and e-mail optimization. All of the services are designed to help its clients acquire customers more effectively, sell to those customers more often and more efficiently, and increase the lifetime value of each customer. The Company sells its products and services to consumers through the Internet. It sells and markets its services for clients through a direct sales force located in offices in the United States, Europe and Asia Pacific. Some of the competitors of the Company are Art Technology Group, Inc., IBM Corporation, IBM Global Services, Accenture, Inc., GSI Commerce, Inc., asknet Inc., Arvato, ValueClick, Inc. and aQuantive, Inc. The Company is subject to a number of foreign and domestic laws and regulations that affect companies conducting business on the internet.