Biogen Inc (BIIB)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	175.04	166.44	96.99	87.07	216.06
Days of sales outstanding (DSO)	days	52.99	61.75	61.17	51.50	51.96
Number of days of payables	days	30.18	26.56	35.46	37.96	91.98
Cash conversion cycle	days	197.85	201.64	122.70	100.61	176.04

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 175.04 + 52.99 – 30.18
= 197.85

The cash conversion cycle of Biogen Inc has shown some fluctuations over the past five years. As of December 31, 2020, the company's cash conversion cycle was 176.04 days, indicating that it took Biogen approximately 176 days to convert its investments in inventory and accounts receivable into cash.

By December 31, 2021, the cash conversion cycle had improved to 100.61 days, suggesting that Biogen was able to manage its inventory and accounts receivable more efficiently, leading to a quicker conversion of investments into cash.

However, by December 31, 2022, the cash conversion cycle increased to 122.70 days, indicating a slight slowdown in the cash conversion process compared to the previous year.

In the subsequent years, there was a significant increase in the cash conversion cycle for Biogen. By December 31, 2023, the cycle extended to 201.64 days, and by December 31, 2024, it further increased to 197.85 days. These longer cash conversion cycles may imply challenges in managing inventory, accounts receivable, and accounts payable effectively, potentially affecting Biogen's liquidity and working capital management.

Overall, fluctuations in the cash conversion cycle of Biogen Inc over the five-year period reflect changes in the company's operational efficiency and effectiveness in converting its investments into cash. Further analysis of the underlying factors contributing to these fluctuations would provide more insights into Biogen's working capital management and operational performance.