Chemed Corp (CHE)
Cash conversion cycle
| 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 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 1.85 | 1.86 | 2.29 | 2.54 | 2.59 | 2.96 | 3.13 | 2.96 | 2.77 | 2.74 | 2.82 | 2.89 | 2.82 | 2.69 | 2.24 | 1.98 | 1.81 | 1.88 | 1.98 | 1.98 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 1.85 | 1.86 | 2.29 | 2.54 | 2.59 | 2.96 | 3.13 | 2.96 | 2.77 | 2.74 | 2.82 | 2.89 | 2.82 | 2.69 | 2.24 | 1.98 | 1.81 | 1.88 | 1.98 | 1.98 |
March 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 1.85 + — – —
= 1.85
Chemed Corp's cash conversion cycle has shown some fluctuations over the periods from June 30, 2020, to March 31, 2025. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
Chemed Corp's cash conversion cycle started at 1.98 days in June 2020 and remained relatively stable until March 2021, decreasing slightly to 1.81 days. However, from June 2021 onwards, the cash conversion cycle began to increase, reaching its peak at 3.13 days on September 30, 2023.
The company's cash conversion cycle then decreased and stabilized around 2.5 days from March 31, 2024, to September 30, 2024, before experiencing a significant drop to 1.86 days on December 31, 2024, and further to 1.85 days by March 31, 2025.
The fluctuations in Chemed Corp's cash conversion cycle indicate changes in its efficiency in managing its working capital and converting it into cash. A shorter cash conversion cycle implies a more efficient use of resources and quicker cash generation from sales, while a longer cycle may indicate issues with inventory management or delays in collecting receivables. It is essential for Chemed Corp to monitor and manage its cash conversion cycle effectively to ensure optimal liquidity and operational efficiency.
Peer comparison
Mar 31, 2025