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.