CONMED Corporation (CNMD)
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 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 204.38 | 219.16 | 225.59 | 240.95 | 255.78 | 235.05 | 231.70 | 208.25 | 191.03 | 188.84 | 175.54 | 182.53 | 176.86 | 163.52 | 157.55 | 148.74 | 139.61 | 152.13 | 155.55 | 158.11 |
| Days of sales outstanding (DSO) | days | 71.04 | 71.90 | 73.46 | 70.83 | 66.80 | 67.39 | 70.78 | 65.56 | 66.41 | 61.02 | 63.03 | 67.92 | 74.97 | 69.53 | 60.15 | 63.92 | 72.27 | 67.81 | 72.50 | 71.75 |
| Number of days of payables | days | 56.64 | 55.07 | 54.16 | 55.09 | 56.49 | 57.24 | 59.16 | 55.37 | 47.99 | 38.50 | 46.24 | 49.47 | 48.38 | 51.20 | 35.71 | 48.90 | 47.47 | 40.11 | 46.03 | 50.36 |
| Cash conversion cycle | days | 218.78 | 236.00 | 244.89 | 256.68 | 266.09 | 245.20 | 243.32 | 218.44 | 209.45 | 211.37 | 192.32 | 200.97 | 203.45 | 181.85 | 181.99 | 163.77 | 164.41 | 179.84 | 182.01 | 179.50 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 204.38 + 71.04 – 56.64
= 218.78
The cash conversion cycle of Conmed Corp. over the past eight quarters has shown fluctuation, with a gradual increase in the cycle duration. In Q1 2022, the company had a relatively shorter cash conversion cycle of 218.44 days, which indicates that the firm was able to convert its investments in inventory into cash relatively quickly. However, the cycle duration increased over the subsequent quarters, reaching a peak of 266.09 days in Q4 2022, reflecting a potential delay in converting inventory into sales and cash receipts.
In Q4 2023, the cash conversion cycle decreased to 218.78 days, indicating a slight improvement in the efficiency of Conmed's working capital management compared to the previous quarter. Despite this improvement, the company still has room for further optimization to streamline its operations and enhance cash flow generation.
Overall, the trend suggests that Conmed Corp. may be facing challenges in managing its inventory, receivables, and payables efficiently, impacting the cash conversion cycle. The company should focus on strategies to reduce the cycle duration, such as improving inventory turnover, optimizing payment terms with suppliers, and accelerating the collection of receivables to enhance liquidity and profitability.
Peer comparison
Dec 31, 2023