Adapthealth Corp (AHCO)

Cash conversion cycle

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Days of inventory on hand (DOH) days 19.78 16.10 18.26 22.37 23.88
Days of sales outstanding (DSO) days 50.35 54.35 50.72 59.57 68.18
Number of days of payables days 40.27 29.97 31.81 45.06 77.60
Cash conversion cycle days 29.87 40.48 37.17 36.87 14.46

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 19.78 + 50.35 – 40.27
= 29.87

The cash conversion cycle of Adapthealth Corp has exhibited fluctuations over the years. From 2020 to 2021, the cycle increased significantly from 14.46 days to 36.87 days, indicating a potential delay in converting investments into cash. This trend continued in 2022 and 2023 with the cycle extending to 37.17 days and 40.48 days, respectively.

However, there was a slight improvement in the cash conversion cycle in 2024, dropping to 29.87 days. This suggests that Adapthealth Corp may have managed its receivables, inventory, and payables more efficiently during that period.

Overall, the increasing trend in the cash conversion cycle from 2020 to 2023 raises concerns about the company's liquidity and operating efficiency. Monitoring and potentially optimizing the components of the cycle, such as managing inventory levels and collecting receivables more promptly, could help improve Adapthealth Corp's cash conversion cycle in the future.


Peer comparison

Dec 31, 2024