Arrowhead Pharmaceuticals Inc (ARWR)

Cash conversion cycle

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Days of inventory on hand (DOH)	days	—	—	—	17.84	26.65
Days of sales outstanding (DSO)	days	—	—	2.12	27.07	3.51
Number of days of payables	days	35.42	124.63	7.76	38.68	42.81
Cash conversion cycle	days	-35.42	-124.63	-5.65	6.23	-12.65

September 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + — – 35.42
= -35.42

The cash conversion cycle of Arrowhead Pharmaceuticals Inc has fluctuated significantly over the past five years. In 2024, the company had a negative cash conversion cycle of -35.42 days, indicating that it was able to convert its investments in inventory and receivables back into cash quickly. This represents an improvement compared to the previous year, where the company had a much longer cash conversion cycle of -124.63 days, suggesting a more efficient management of working capital.

In 2022, Arrowhead Pharmaceuticals Inc had a slightly negative cash conversion cycle of -5.65 days, indicating that it was able to convert its resources into cash relatively quickly. This was a significant improvement compared to 2021 when the company had a positive cash conversion cycle of 6.23 days, potentially indicating a longer time to convert investments into cash.

In 2020, Arrowhead Pharmaceuticals Inc experienced a negative cash conversion cycle of -12.65 days, suggesting that it was able to manage its working capital efficiently, albeit not as efficiently as in the most recent years.

Overall, an analysis of Arrowhead Pharmaceuticals Inc's cash conversion cycle shows varying levels of efficiency in managing working capital over the past five years, with the company demonstrating improvements in its cash conversion cycle in recent years.