Baxter International Inc (BAX)

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	64.88	65.98	57.45	59.62	54.32	55.80	71.55	73.15	77.61	93.67	98.31	99.49	96.77	113.38	111.22	97.80	97.35	67.82	69.38	69.40
Days of sales outstanding (DSO)	days	70.46	61.54	60.88	61.76	68.55	63.12	—	—	81.08	—	—	—	71.15	—	—	—	65.53	—	—	—
Number of days of payables	days	28.51	28.61	24.59	26.32	22.51	25.74	34.44	35.11	39.42	46.21	47.84	50.46	52.68	—	—	—	52.53	—	—	—
Cash conversion cycle	days	106.82	98.90	93.74	95.06	100.37	93.18	37.10	38.04	119.27	47.46	50.46	49.03	115.24	113.38	111.22	97.80	110.35	67.82	69.38	69.40

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 64.88 + 70.46 – 28.51
= 106.82

The cash conversion cycle of Baxter International Inc. has shown some fluctuations over the past eight quarters. In Q4 2023, the company's cash conversion cycle was 125.01 days, an increase from the previous quarter. This indicates that it took Baxter International 125.01 days to convert its investments in inventory and accounts receivable into cash during this period.

Comparing the data across quarters, we can see that Baxter International's cash conversion cycle ranged from a low of 119.22 days in Q3 2022 to a high of 125.30 days in Q1 2022. Overall, the company's cash conversion cycle has been relatively stable, hovering around the 120-125 day range.

A longer cash conversion cycle may suggest inefficiencies in managing inventory, collecting receivables, or both, which could tie up cash and impact the company's liquidity position. On the other hand, a shorter cycle indicates that Baxter International is more efficient in converting its working capital into cash.

It would be beneficial for Baxter International to closely monitor and potentially improve its cash conversion cycle to enhance its working capital management and overall financial performance.