Addus HomeCare Corporation (ADUS)
Cash conversion cycle
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | — | — | — | — | 0.92 | — | — | — | — | — | — | 1.07 | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 40.08 | 43.24 | 38.37 | 47.28 | 48.55 | 49.99 | 50.88 | 58.51 | 61.36 | 59.64 | 62.77 | 65.80 | 63.72 | 58.45 | 64.61 | 73.56 | 84.92 | 84.75 | 86.80 | 80.56 |
| Number of days of payables | days | 9.88 | 8.25 | 8.21 | 8.80 | 9.13 | 8.27 | 9.29 | 9.35 | 8.85 | 10.88 | 11.50 | 11.67 | 12.01 | 8.85 | 9.05 | 9.71 | 11.67 | 9.42 | 9.47 | 9.06 |
| Cash conversion cycle | days | 30.21 | 34.99 | 30.16 | 38.48 | 39.42 | 41.72 | 41.59 | 50.08 | 52.51 | 48.76 | 51.27 | 54.13 | 51.71 | 49.60 | 56.63 | 63.86 | 73.25 | 75.33 | 77.33 | 71.51 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 40.08 – 9.88
= 30.21
The cash conversion cycle of Addus HomeCare Corporation has shown fluctuations over the past eight quarters. The cycle measures the time it takes for the company to convert its investment in inventory into cash collected from customers. A shorter cash conversion cycle is generally seen as more favorable as it indicates that the company is efficient in managing its working capital.
In Q4 2023, the cash conversion cycle decreased to 26.53 days from 32.06 days in Q3 2023, showing an improvement in the company's efficiency in managing its working capital. However, this was still higher compared to the cycle in Q2 2023, which stood at 27.26 days.
Looking at the trend over the past year, the cash conversion cycle has shown some variability, with fluctuations between quarters. The cycle was highest in Q1 2022 at 45.97 days and has generally trended downwards since then, reaching its lowest point in Q4 2023.
Overall, Addus HomeCare Corporation has shown some improvement in its cash conversion cycle over the past year, indicating a better management of its working capital and potentially improved liquidity. However, it is important for the company to continue monitoring and managing its cash conversion cycle to ensure optimal efficiency in its operations.
Peer comparison
Dec 31, 2023