Cardinal Health Inc (CAH)
Cash conversion cycle
| Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 24.88 | 29.58 | 32.24 | 30.52 | 29.70 | 31.60 | 33.80 | 32.14 | 32.65 | 33.18 | 33.10 | 33.44 | 34.21 | 34.94 | 35.27 | 33.20 | 32.98 | 31.88 | 35.26 | 32.29 |
| Days of sales outstanding (DSO) | days | 19.46 | 19.15 | 19.92 | 19.57 | 19.78 | 20.19 | 21.60 | 21.55 | 21.25 | 21.16 | 20.04 | 20.29 | 20.45 | 20.34 | 20.36 | 20.39 | 19.72 | 21.43 | 20.19 | 20.24 |
| Number of days of payables | days | 52.83 | 54.94 | 59.85 | 56.67 | 55.15 | 56.27 | 58.89 | 57.36 | 56.64 | 53.16 | 54.86 | 53.18 | 55.56 | 55.21 | 56.73 | 53.58 | 53.42 | 54.72 | 54.84 | 51.13 |
| Cash conversion cycle | days | -8.49 | -6.21 | -7.70 | -6.58 | -5.68 | -4.48 | -3.50 | -3.67 | -2.74 | 1.18 | -1.71 | 0.55 | -0.90 | 0.08 | -1.11 | 0.01 | -0.71 | -1.41 | 0.62 | 1.41 |
June 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 24.88 + 19.46 – 52.83
= -8.49
The cash conversion cycle of Cardinal Health Inc has shown a fluctuating trend over the past several quarters. The company has managed to maintain a negative cash conversion cycle, suggesting efficient management of working capital during most recent periods.
The cycle has ranged from -8.49 days to 1.41 days over the past five quarters. A negative cash conversion cycle indicates that Cardinal Health Inc is able to collect cash from customers before paying its suppliers and creditors, which is favorable for the company's cash flow management.
However, there have been instances where the cash conversion cycle has turned positive, indicating a delay in cash collection compared to cash payments. This could potentially lead to a strain on liquidity if prolonged.
Overall, Cardinal Health Inc should continue to focus on optimizing its working capital management to ensure a consistently negative cash conversion cycle, indicating efficient utilization of cash resources.
Peer comparison
Jun 30, 2024