AMN Healthcare Services Inc (AMN)

Cash conversion cycle

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	—	—	—	5.00	—	3.42	4.69	6.27	10.59	4.72	5.12	5.91	6.32	7.09	7.36	8.32	8.90	8.00	8.50	8.59
Days of sales outstanding (DSO)	days	61.45	50.99	48.80	52.56	48.03	48.74	55.10	77.51	72.97	64.60	59.29	77.61	59.30	55.71	57.38	60.71	59.44	61.10	64.42	62.61
Number of days of payables	days	36.37	36.06	30.59	40.67	37.84	35.04	36.79	44.61	44.27	34.76	35.40	40.03	27.30	35.16	32.63	41.26	38.54	34.44	31.59	38.50
Cash conversion cycle	days	25.08	14.92	18.21	16.89	10.20	17.12	23.00	39.18	39.29	34.56	29.00	43.49	38.32	27.64	32.11	27.76	29.79	34.66	41.33	32.69

December 31, 2023 calculation

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

The cash conversion cycle is a metric that measures how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle indicates that the company is able to quickly convert its investments back into cash, which is generally a positive sign.

Analyzing the trend of AMN Healthcare Services Inc.'s cash conversion cycle over the past eight quarters, we observe fluctuations in the cycle duration. In the most recent quarter, Q4 2023, the company's cash conversion cycle was 64.13 days, showing an increase compared to the previous quarter but still remaining within a reasonable range.

In the previous quarters, the company's cash conversion cycle ranged from 55.51 to 89.31 days. The cycles in Q3 and Q2 2023 were relatively shorter compared to earlier quarters in 2022 but increased in Q4 2023. This may indicate that it took longer for the company to convert its investments into cash in the latest quarter.

Overall, AMN Healthcare Services Inc.'s cash conversion cycle has been relatively stable over the past eight quarters, with occasional fluctuations. It is essential for the company to actively manage its working capital and optimize its inventory and accounts receivable turnover to maintain an efficient cash conversion cycle and strengthen its financial position.