Bio-Rad Laboratories Inc (BIO)

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	134.95	124.59	92.19	117.23	106.19
Days of sales outstanding (DSO)	days	34.51	33.22	26.56	30.36	31.15
Number of days of payables	days	25.00	23.39	22.87	26.27	20.51
Cash conversion cycle	days	144.45	134.41	95.88	121.32	116.83

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 134.95 + 34.51 – 25.00
= 144.45

The cash conversion cycle (CCC) of Bio-Rad Laboratories Inc. has exhibited varying trends over the past five years. In 2023, the company's CCC increased to 253.35 days from 237.12 days in 2022, indicating that Bio-Rad is taking longer to convert its investments in inventory and accounts receivable into cash. This could suggest inefficiencies in managing inventory levels or collecting receivables.

Comparing to 2021 where the CCC was at 175.42 days, the recent increase indicates that Bio-Rad could be facing challenges in optimizing its working capital management. In 2020 and 2019, the CCC stood at 219.21 days and 216.70 days respectively, showing improvements in working capital efficiency during those years.

Overall, the increasing trend in the cash conversion cycle for Bio-Rad Laboratories Inc. over the past two years signifies a potential need for the company to focus on streamlining its operations, particularly in inventory management and accounts receivable collection, to enhance cash flow and liquidity.