Adapthealth Corp (AHCO)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 15.25 | 18.26 | 22.37 | 23.88 | 10.96 |
| Days of sales outstanding (DSO) | days | 54.35 | 50.72 | 59.57 | 68.18 | 65.22 |
| Number of days of payables | days | 28.38 | 31.81 | 45.06 | 77.60 | 65.63 |
| Cash conversion cycle | days | 41.22 | 37.17 | 36.87 | 14.46 | 10.55 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 15.25 + 54.35 – 28.38
= 41.22
The cash conversion cycle of AdaptHealth Corp has shown variability over the past five years. In 2023, the cash conversion cycle increased slightly to 31.23 days from 30.58 days in 2022. This implies that the company took slightly longer to convert its investments in inventory and accounts receivable into cash during 2023.
Comparing these figures to the previous years, the company's cash conversion cycle was relatively stable in 2021 and 2022, hovering around the 30-day mark. However, in 2020, there was a significant increase in the cash conversion cycle to 5.39 days, indicating that AdaptHealth Corp took longer to convert its investments into cash compared to the previous years.
Interestingly, in 2019, the cash conversion cycle was negative (-0.52 days), suggesting that the company was able to convert its investments into cash faster than the current liabilities would require payment. This negative value indicates efficient management of working capital during that year.
Overall, analyzing the trend in the cash conversion cycle for AdaptHealth Corp shows varying levels of efficiency in managing working capital and converting investments into cash over the past five years.
Peer comparison
Dec 31, 2023