Charles River Laboratories (CRL)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	77.23	144.22	112.87	95.73	102.25
Days of sales outstanding (DSO)	days	63.86	69.76	67.01	68.66	76.70
Number of days of payables	days	38.91	64.07	90.86	95.24	67.44
Cash conversion cycle	days	102.18	149.91	89.03	69.15	111.52

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 77.23 + 63.86 – 38.91
= 102.18

The cash conversion cycle of Charles River Laboratories has fluctuated over the past five years. In December 2020, the cash conversion cycle was 111.52 days, indicating that it took the company approximately 111.52 days to convert its investments in inventory and accounts receivable into cash from sales.

Over the following years, there were variations in the cash conversion cycle. By the end of December 2021, the cycle decreased to 69.15 days, suggesting an improvement in the efficiency of the company's cash management. However, there was a slight increase in the cycle by the end of December 2022, reaching 89.03 days.

In December 2023, there was a significant increase in the cash conversion cycle, jumping to 149.91 days, which may indicate potential challenges in managing inventory levels or collecting receivables efficiently. However, in December 2024, the cycle decreased to 102.18 days, reflecting some improvement from the previous year.

Overall, Charles River Laboratories should continue to monitor and manage its cash conversion cycle effectively to ensure optimal working capital management and overall financial health.