Biomarin Pharmaceutical Inc (BMRN)
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 | 784.92 | 674.72 | 602.50 | 486.33 | 690.75 |
| Days of sales outstanding (DSO) | days | 97.42 | 81.40 | 74.36 | 89.76 | 81.98 |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 882.35 | 756.11 | 676.86 | 576.09 | 772.73 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 784.92 + 97.42 – —
= 882.35
The cash conversion cycle of Biomarin Pharmaceutical Inc has shown a fluctuating trend over the past five years. In 2023, the company's cash conversion cycle increased to 882.35 days from 756.11 days in 2022. This indicates that Biomarin took longer to convert its investments in inventory into cash during the most recent year.
Comparing to previous years, the cash conversion cycle was also elevated in 2019 at 772.73 days, which was followed by a significant reduction in 2020 to 576.09 days, indicating a more efficient cash management during that period. Subsequently, the cycle increased steadily in 2021 and 2022 before reaching the highest level in 2023.
It is important for Biomarin to closely monitor and manage its cash conversion cycle to ensure optimal liquidity and working capital management. Prolonged cycles can tie up cash in inventory and receivables, potentially impacting the company's ability to meet short-term obligations and invest in growth opportunities. The company may need to reassess its inventory management and collection practices to improve its cash conversion efficiency.
Peer comparison
Dec 31, 2023