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.