Amedisys Inc (AMED)
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 | — | — | 7.30 | 3.97 | 3.62 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 0.00 | 0.00 | 7.30 | 3.97 | 3.62 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + — – —
= 0.00
The cash conversion cycle is a crucial metric that measures how efficiently a company manages its cash flows related to its operating cycle. For Amedisys Inc, the trend in the cash conversion cycle from 2020 to 2024 reveals important insights.
In 2020, the cash conversion cycle was 3.62 days, indicating that the company was able to convert its investments in inventory and accounts receivable back into cash relatively quickly.
The following year, in 2021, the cash conversion cycle slightly increased to 3.97 days. This minor increase could suggest a small delay in the company's cash conversion process.
However, in 2022, the cash conversion cycle significantly jumped to 7.30 days, which is more than double compared to the previous year. This increase may indicate challenges in managing inventory or delayed collections on accounts receivable, leading to a longer cash conversion cycle.
Interestingly, in 2023 and 2024, the cash conversion cycle dropped to 0.00 days. A cash conversion cycle of zero days suggests that Amedisys Inc may be managing its cash flows very efficiently, possibly by quickly converting investments back into cash or by operating on a cash-first basis.
Overall, the fluctuation in Amedisys Inc's cash conversion cycle over the years reflects varying efficiencies in managing working capital components. Monitoring this metric can help assess the company's financial health and operational effectiveness.
Peer comparison
Dec 31, 2024