Collegium Pharmaceutical Inc (COLL)

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	29.52	39.78	20.03	18.70	10.83
Days of sales outstanding (DSO)	days	142.47	166.80	151.00	108.18	90.02
Number of days of payables	days	7.94	2.99	4.82	12.00	7.02
Cash conversion cycle	days	164.05	203.59	166.20	114.88	93.84

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 29.52 + 142.47 – 7.94
= 164.05

The cash conversion cycle of Collegium Pharmaceutical Inc has shown fluctuations over the past five years. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

In 2023, Collegium Pharmaceutical Inc had a cash conversion cycle of 206.60 days, reflecting an improvement compared to the previous year. This indicates that the company was able to more efficiently manage its inventory, accounts payable, and accounts receivable to convert them into cash.

In 2022, the cash conversion cycle increased to 276.89 days, suggesting that Collegium Pharmaceutical Inc took longer to convert its investments into cash compared to the previous year. This might indicate challenges in managing inventory levels, collecting receivables, or delaying payments to suppliers.

In 2021, the cash conversion cycle was 221.13 days, showing a slight decrease from the previous year. This suggests some improvement in the company's operational efficiency in converting resources into cash flows.

In 2020, the cash conversion cycle was 127.50 days, indicating a significant improvement compared to the previous years. This significant decrease suggests that Collegium Pharmaceutical Inc was able to manage its working capital more effectively, possibly by optimizing inventory levels and accelerating cash collections.

In 2019, the cash conversion cycle was 96.15 days, reflecting a relatively shorter cycle compared to the subsequent years. This indicates that Collegium Pharmaceutical Inc had been more efficient in managing its working capital and converting investments into cash flows during that period.

Overall, Collegium Pharmaceutical Inc's cash conversion cycle has shown variability over the past five years, with improvements in some years and challenges in others. It is important for the company to continue monitoring and optimizing its working capital management practices to ensure efficient operations and cash flow generation.