ADMA Biologics Inc (ADMA)

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 300.32 320.75 368.83 377.96 372.83 366.93 390.87 447.43 501.60 561.61 562.76 580.84 570.70 548.03 538.57 552.18 485.56 472.60 409.36 406.70
Days of sales outstanding (DSO) days 42.79 47.81 33.28 63.93 38.76 48.79 64.42 53.21 36.73 58.47 62.62 99.52 128.86 108.64 147.89 116.65 114.44 57.38 63.83 72.03
Number of days of payables days 35.67 29.91 29.08 36.55 33.77 24.41 29.20 35.35 40.64 86.86 43.87 58.92 56.87 82.99 33.31 71.28 65.95 54.07 50.51 71.18
Cash conversion cycle days 307.44 338.65 373.03 405.34 377.83 391.31 426.10 465.29 497.69 533.21 581.50 621.44 642.69 573.67 653.14 597.55 534.05 475.91 422.68 407.54

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 of ADMA Biologics Inc has shown fluctuating trends over the examined periods. The company's cash conversion cycle, a measure of the time it takes to convert its investments in inventory and other resources into cash flows from sales, started at 407.54 days on March 31, 2020, reaching a peak of 653.14 days on June 30, 2021.

During the period of analysis, there were significant improvements in the cash conversion cycle from September 30, 2021, to December 31, 2024, where it decreased from 573.67 days to 307.44 days. This improvement could indicate more efficient management of inventory, accounts receivable, and accounts payable, leading to a shorter cash conversion cycle.

The decreasing trend in the cash conversion cycle suggests that ADMA Biologics Inc has been successful in optimizing its working capital management, which is essential for ensuring liquidity and operational efficiency. A shorter cash conversion cycle indicates that the company is able to generate cash faster from its operating activities, which can be crucial for supporting growth and meeting financial obligations in a timely manner.

Overall, the decreasing trend in ADMA Biologics Inc's cash conversion cycle reflects positive developments in the company's working capital management and operational efficiency, which could contribute to its financial stability and sustainability.