Amedisys Inc (AMED)
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 | — | 3.61 | 2.00 | 1.84 | 12.52 |
| Days of sales outstanding (DSO) | days | 53.56 | 50.76 | 26,872.86 | 4,020.20 | 45.09 |
| Number of days of payables | days | 3.97 | 6.26 | 5.70 | 6.67 | 5.26 |
| Cash conversion cycle | days | 49.59 | 48.11 | 26,869.16 | 4,015.36 | 52.36 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 53.56 – 3.97
= 49.59
The cash conversion cycle of Amedisys Inc. has shown a fluctuating trend over the past five years.
In 2023, the company's cash conversion cycle increased to 42.87 days from 36.06 days in 2022. This indicates that it took Amedisys longer to convert its investments in inventory and accounts receivable into cash during the year.
Compared to 2021, when the cash conversion cycle was 34.02 days, there was a significant increase, reflecting potential inefficiencies in managing working capital in 2023. However, it is worth noting that the cash conversion cycle in 2023 was still lower than in 2019 when it stood at 34.43 days.
Overall, the trend in Amedisys Inc.'s cash conversion cycle suggests that the company may have experienced challenges in optimizing its working capital management in 2023 compared to previous years. This metric is important as it impacts the company's liquidity and efficiency in converting its operational activities into cash flows.
Peer comparison
Dec 31, 2023