Cigna Corp (CI)

Cash conversion cycle

		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	12.49	7.43	7.76	7.39	8.52	9.62	9.08	8.51	9.24	5.61	5.74	5.67	6.23	5.36	5.57	5.25	5.49	5.56
Days of sales outstanding (DSO)	days	33.13	36.68	35.95	35.31	34.81	34.94	37.20	32.98	31.60	34.87	33.84	30.45	27.74	31.37	29.98	27.80	25.47	33.00
Number of days of payables	days	18.93	12.90	13.88	12.91	13.86	16.45	17.16	16.13	16.53	10.51	10.65	10.96	10.78	10.75	11.12	11.44	10.51	11.58
Cash conversion cycle	days	26.69	31.20	29.83	29.78	29.47	28.11	29.12	25.36	24.32	29.97	28.93	25.16	23.19	25.98	24.43	21.61	20.46	26.97

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 12.49 + 33.13 – 18.93
= 26.69

The cash conversion cycle for Cigna Group (The) has fluctuated during the past eight quarters. In Q4 2023, the cash conversion cycle was at its lowest point of 3.88 days, indicating the company was efficient in converting its resources into cash during that period. This was a significant improvement from the previous quarter where the cycle was much longer at 12.17 days.

In Q2 2023, the cash conversion cycle decreased to 7.64 days but then increased to 11.00 days in Q1 2023. This fluctuation suggests some inconsistency in the company's ability to manage its working capital efficiently. Comparing Q4 2022 and Q1 2023, there was a marked contrast, as the cycle increased from 0.84 days to 11.00 days, indicating potential issues in managing cash flows and working capital during that period.

Looking at the trend over the past eight quarters, the company experienced fluctuations in its cash conversion cycle, with periods of shorter and longer cycles. It is crucial for Cigna Group (The) to focus on optimizing its accounts receivable, inventory, and accounts payable management to ensure a more stable and efficient cash conversion cycle in the future.