Biogen Inc (BIIB)

Cash conversion cycle

Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Days of inventory on hand (DOH) days 166.44 96.99 87.07 216.06 150.11
Days of sales outstanding (DSO) days 61.75 61.17 51.50 51.96 47.74
Number of days of payables days 26.56 35.46 37.96 91.98 99.08
Cash conversion cycle days 201.64 122.70 100.61 176.04 98.77

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 166.44 + 61.75 – 26.56
= 201.64

The cash conversion cycle of Biogen Inc has shown an increasing trend over the past five years, with the cycle lengthening from 113.76 days in 2019 to 383.96 days in 2023. This indicates that the company is taking longer to convert its investments in inventory and other resources into cash.

The significant increase in the cash conversion cycle implies that Biogen Inc may be facing challenges in efficiently managing its working capital and converting its sales into cash. A longer cash conversion cycle can tie up more of the company's capital in operations, potentially impacting its liquidity and overall financial health.

It is essential for Biogen Inc to closely monitor and manage its cash conversion cycle to improve its cash flow efficiency and optimize its working capital management. Strategies such as streamlining inventory management, reducing receivables collection period, and extending payables payment terms could help in shortening the cash conversion cycle and enhancing the company's financial performance.


Peer comparison

Dec 31, 2023


See also:

Biogen Inc Cash Conversion Cycle