Cardinal Health Inc (CAH)
Cash conversion cycle
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 28.65 | 27.49 | 28.73 | 26.26 | 24.85 | 29.57 | 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 |
| Days of sales outstanding (DSO) | days | 21.72 | 20.80 | 20.31 | 19.15 | 19.43 | 19.14 | 19.91 | 19.56 | 19.78 | 20.20 | 21.60 | 21.55 | 21.25 | 21.16 | 20.04 | 20.29 | 20.45 | 20.34 | 20.36 | 20.39 |
| Number of days of payables | days | 59.09 | 55.83 | 53.19 | 51.06 | 52.77 | 54.92 | 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 |
| Cash conversion cycle | days | -8.73 | -7.54 | -4.15 | -5.64 | -8.49 | -6.21 | -7.71 | -6.59 | -5.67 | -4.48 | -3.50 | -3.67 | -2.74 | 1.18 | -1.71 | 0.55 | -0.90 | 0.08 | -1.11 | 0.01 |
June 30, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 28.65 + 21.72 – 59.09
= -8.73
The analysis of Cardinal Health Inc.'s cash conversion cycle (CCC) over the specified period reveals significant fluctuations and an overall trend toward a more negative cycle. The CCC measures the number of days it takes for a company to convert its investments in inventory and receivables into cash, offset by its trade payables.
Between September 2020 and September 2021, the company's CCC hovered around near zero, with values oscillating slightly above and below zero days, indicating a cycle close to cash-neutral status—neither significantly delaying collections nor extending payables excessively. For instance, on September 30, 2020, the CCC was approximately 0.01 days, and by September 30, 2021, it increased modestly to 0.55 days.
From late 2021 onward, there is a clear trend toward declining CCC values, becoming increasingly negative. Starting at -1.71 days as of December 31, 2021, the CCC progresses to -3.67 days by September 30, 2022, and further declines to -7.71 days by December 31, 2023. The negative values indicate that the company is extending its payment obligations to suppliers beyond the period it collects from customers, thus financing operations through supplier credit for longer durations. This trend reflects an aggressive management of working capital, possibly influenced by strategic supplier negotiations or industry-specific practices.
During the period from March 2024 through June 2025, the CCC shows some variability, fluctuate between approximately -4.15 days and -8.73 days, though the overall pattern remains negative. Notably, mid-2024 data shows a slight reduction in the negativity of the cycle, but it again deepens toward the end of the period.
In summary, over the analyzed timeline, Cardinal Health Inc. has maintained a predominantly negative cash conversion cycle, suggesting efficient cash flow management characterized by extended supplier credit terms relative to receivables collection period. The increasing negativity over time implies an ongoing strategy to optimize working capital by delaying payments to suppliers while maintaining regular receivables collection, thus improving liquidity and operational efficiency.
Peer comparison
Jun 30, 2025