Cigna Corp (CI)

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	9.23	8.52	6.78	6.23	5.49
Days of sales outstanding (DSO)	days	33.13	34.81	31.60	27.74	25.47
Number of days of payables	days	13.98	13.86	12.12	10.78	10.51
Cash conversion cycle	days	28.37	29.47	26.26	23.19	20.46

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 9.23 + 33.13 – 13.98
= 28.37

The cash conversion cycle for Cigna Group (The) has fluctuated over the past five years. In 2023, the company's cash conversion cycle increased to 3.88 days from 0.84 days in 2022, indicating that it took Cigna Group longer to convert its investments in inventory and accounts receivable into cash during the year. This may suggest potential challenges in managing working capital efficiently.

Compared to 2021 when the cash conversion cycle was negative (-0.30 days), indicating that Cigna Group was able to convert its investments into cash quickly, the increase in 2023 suggests a reversal in the company's cash conversion efficiency.

In 2020 and 2019, the cash conversion cycles were 21.54 days and 18.57 days, respectively, reflecting longer cash conversion periods compared to more recent years. These longer cycles could have been influenced by factors such as changes in inventory levels, payment terms with suppliers, and collection periods from customers.

Overall, fluctuations in the cash conversion cycle of Cigna Group (The) over the years indicate varying levels of efficiency in managing its operating cash flows and working capital. A longer cash conversion cycle may tie up cash resources and impact liquidity, while a shorter cycle suggests effective management of working capital and quicker conversion of investments into cash.