ADMA Biologics Inc (ADMA)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	300.32	372.83	501.60	570.70	485.56
Days of sales outstanding (DSO)	days	42.79	38.76	36.73	128.86	114.44
Number of days of payables	days	35.67	33.77	40.64	56.87	65.95
Cash conversion cycle	days	307.44	377.83	497.69	642.69	534.05

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 300.32 + 42.79 – 35.67
= 307.44

The cash conversion cycle for ADMA Biologics Inc has shown fluctuations over the past five years. As of December 31, 2020, the company had a cash conversion cycle of 534.05 days, indicating that it took a considerable amount of time to convert its investments in inventory and accounts receivable into cash.

However, by December 31, 2021, the cash conversion cycle increased to 642.69 days, suggesting a worsening liquidity position and potential inefficiencies in managing working capital. The subsequent year, December 31, 2022, saw a notable improvement in the cash conversion cycle, decreasing to 497.69 days, possibly indicating better inventory management or faster collections of accounts receivable.

By December 31, 2023, the cash conversion cycle further improved to 377.83 days, reflecting a more efficient cash conversion process. Finally, as of December 31, 2024, the company had reduced its cash conversion cycle to 307.44 days, potentially indicating enhanced working capital management and a stronger cash position.

Overall, the trend in the cash conversion cycle for ADMA Biologics Inc fluctuated over the five-year period, with periods of both improvement and deterioration. This metric is crucial as it highlights the efficiency of the company's operations in converting investments in inventory and receivables into cash. Further analysis and monitoring of the cash conversion cycle can help evaluate the company's working capital management and liquidity performance.