Amphastar P (AMPH)

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	131.72	145.88	144.30	150.26	151.16	150.19	143.97	142.04	142.31	157.39	163.69	163.56	171.15	201.29	195.64	207.93	211.79	205.17	184.01	146.97
Days of sales outstanding (DSO)	days	65.11	72.23	70.66	70.83	64.96	58.04	61.85	58.68	65.70	69.05	64.53	77.27	68.86	56.68	54.49	64.45	51.38	50.26	54.99	63.43
Number of days of payables	days	31.66	42.41	25.97	31.86	29.92	29.04	45.31	35.59	34.06	34.01	46.39	38.72	43.05	42.84	40.55	31.81	48.03	41.17	58.34	64.10
Cash conversion cycle	days	165.16	175.70	188.99	189.22	186.20	179.19	160.51	165.13	173.95	192.43	181.83	202.11	196.96	215.13	209.58	240.57	215.14	214.26	180.66	146.31

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 131.72 + 65.11 – 31.66
= 165.16

The cash conversion cycle of Amphastar Pharmaceuticals Inc has shown fluctuations over the past eight quarters, ranging from 160.51 days to 189.22 days. A lower cash conversion cycle indicates that the company is efficient in managing its working capital, while a higher cycle suggests inefficiencies in converting inventory and receivables into cash.

In Q2 2022, the company had the lowest cash conversion cycle of 160.51 days, indicating a more efficient cash management system during that period. However, in Q2 2023 and Q1 2023, the cash conversion cycle increased significantly to 188.99 days and 189.22 days, respectively, indicating potential issues with the company's ability to convert its investments in inventory and receivables into cash.

It is important for Amphastar Pharmaceuticals Inc to monitor and manage its cash conversion cycle effectively to ensure optimal working capital management and liquidity. By analyzing the factors contributing to the fluctuations in the cycle, the company can identify areas for improvement in its cash flow operations.