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 | ||
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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.
Peer comparison
Dec 31, 2023
See also:
Baxter International Inc Cash Conversion Cycle (Quarterly Data)