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.