AMN Healthcare Services Inc (AMN)

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	—	—	10.59	6.32	8.90
Days of sales outstanding (DSO)	days	61.45	48.04	72.97	60.03	58.91
Number of days of payables	days	36.37	37.84	44.27	27.30	38.54
Cash conversion cycle	days	25.08	10.20	39.29	39.05	29.27

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 61.45 – 36.37
= 25.08

The cash conversion cycle of AMN Healthcare Services Inc. has demonstrated fluctuating trends over the past five years. In 2023, the company's cash conversion cycle increased to 64.13 days from the prior year's 58.28 days, indicating it took longer for the company to convert its investments in inventory into cash receipts from customers. This could be a concern as an extended cash conversion cycle ties up funds in working capital, reducing cash flow efficiency.

Comparing 2023 to previous years, the cash conversion cycle was notably lower than the peak of 83.70 days in 2021 but still higher than the levels seen in 2020 (63.24 days) and 2019 (64.20 days). The decrease from 2021 to 2022 was a positive sign, suggesting the company improved its efficiency in managing inventory, receivables, and payables.

Overall, AMN Healthcare Services Inc. has experienced varying cash conversion cycles in recent years, which may reflect changes in operational efficiency, working capital management, or industry dynamics. Monitoring and potentially optimizing the cash conversion cycle will be crucial for the company to enhance liquidity, profitability, and overall financial performance.