Alkermes Plc (ALKS)
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 | 74.86 | 69.11 | 76.97 | 68.89 | 60.66 |
| Days of sales outstanding (DSO) | days | 90.15 | 74.00 | 95.60 | 98.37 | 97.27 |
| Number of days of payables | days | 18.68 | 24.34 | 13.94 | 25.53 | 22.21 |
| Cash conversion cycle | days | 146.34 | 118.77 | 158.64 | 141.73 | 135.71 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 74.86 + 90.15 – 18.68
= 146.34
The cash conversion cycle of Alkermes Plc has shown some fluctuations over the years, ranging from 135.71 days at the end of 2020 to 146.34 days at the end of 2024. A higher number of days indicates that the company takes longer to convert its investments in inventory and other resources into cash inflows from sales.
The trend of the cash conversion cycle indicates that the company has experienced changes in its efficiency regarding managing its working capital components. An increase in the number of days from 2020 to 2022 suggests potential challenges in converting investments into cash, which could indicate issues in managing inventory, receivables, and payables effectively.
The decrease in the cash conversion cycle from 2022 to 2023 and then a subsequent increase in 2024 might indicate that the company made improvements in its working capital management practices but then faced challenges again.
Overall, a thorough analysis of the cash conversion cycle would involve examining the underlying reasons behind these fluctuations to identify areas for improvement in working capital management efficiency.
Peer comparison
Dec 31, 2024