Bio-Rad Laboratories Inc (BIO)

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	139.79	135.29	134.12	131.42	128.57	118.98	113.52	103.38	95.02	101.77	105.91	111.88	123.74	122.99	122.27	106.85	106.20	127.67	127.68	126.29
Days of sales outstanding (DSO)	days	69.31	63.66	66.91	68.30	66.60	57.94	58.35	59.35	53.17	51.40	50.92	55.34	60.47	62.05	57.82	60.37	62.52	56.88	60.82	62.94
Number of days of payables	days	25.90	19.51	25.83	28.10	24.14	24.76	27.34	27.43	23.57	23.57	23.60	25.60	27.73	25.55	—	—	20.51	—	—	—
Cash conversion cycle	days	183.20	179.44	175.20	171.62	171.03	152.16	144.53	135.31	124.62	129.60	133.23	141.61	156.48	159.49	180.09	167.22	148.21	184.55	188.50	189.23

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 139.79 + 69.31 – 25.90
= 183.20

The cash conversion cycle is a measure of how efficiently a company manages its working capital. For Bio-Rad Laboratories Inc., the trend in the cash conversion cycle has been increasing over the past eight quarters, indicating a potential deterioration in the company's working capital management.

In Q1 2022, the cash conversion cycle was at its lowest at 188.16 days, suggesting that the company was able to convert its inventory and receivables into cash relatively quickly. However, since then, the cash conversion cycle has been steadily increasing and reached its peak at 253.35 days in Q4 2023. This prolonged cash conversion cycle may indicate that Bio-Rad Laboratories Inc. is taking longer to convert its inventory and receivables into cash, which could potentially strain its liquidity and working capital.

It is important for the company to closely monitor and analyze the components of the cash conversion cycle, including the days inventory outstanding, days sales outstanding, and days payables outstanding, to identify areas for improvement in its working capital management. By optimizing its cash conversion cycle, Bio-Rad Laboratories Inc. can enhance its efficiency, liquidity, and overall financial performance.