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.