Catalyst Pharmaceuticals Inc (CPRX)

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	26.16	26.52	40.17	27.71	13.83
Days of sales outstanding (DSO)	days	49.05	17.79	17.15	18.35	37.59
Number of days of payables	days	24.74	15.49	14.13	25.35	29.10
Cash conversion cycle	days	50.47	28.82	43.20	20.71	22.33

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 26.16 + 49.05 – 24.74
= 50.47

The cash conversion cycle of Catalyst Pharmaceuticals Inc has exhibited fluctuations over the past five years. In 2023, the cash conversion cycle increased to 50.47 days from 28.82 days in 2022. This indicates that the company took longer to convert its investments in inventory and accounts receivable into cash during the most recent year. Compared to 2021, where the cycle was 43.20 days, there was an increase suggesting potential inefficiencies in managing working capital.

Furthermore, when comparing 2023 to 2020 and 2019, where the cash conversion cycles were 20.71 days and 22.33 days respectively, there has been a significant lengthening of the cycle, indicating a trend towards slower cash conversion processes over the years. This may signal challenges in managing inventory levels, collection of receivables, or potential delays in payment of payables.

Overall, the increasing trend in the cash conversion cycle for Catalyst Pharmaceuticals Inc over the past five years warrants further investigation into the company's working capital management practices to optimize operational efficiency and liquidity.