CVS Health Corp (CVS)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 17.15 | 12.84 | 13.24 | 15.25 | 16.67 | 18.29 | 17.71 | 18.97 | 20.19 | 20.24 | 19.92 | 21.19 | 21.03 | 22.12 | 21.93 | 23.01 | 24.21 | 23.44 | 22.19 | 22.90 |
| Days of sales outstanding (DSO) | days | 43.50 | 42.46 | 37.20 | 36.15 | 39.91 | 37.29 | 34.60 | 33.81 | 34.78 | 33.54 | 35.26 | 35.28 | 34.76 | 35.92 | 34.63 | 35.42 | 32.52 | 37.03 | 35.04 | 36.06 |
| Number of days of payables | days | 15.05 | 11.43 | 11.88 | 12.80 | 13.77 | 15.15 | 13.69 | 13.01 | 15.70 | 15.61 | 15.18 | 14.87 | 14.85 | 16.14 | 14.27 | 14.11 | 14.58 | 15.66 | 13.32 | 13.79 |
| Cash conversion cycle | days | 45.60 | 43.86 | 38.56 | 38.60 | 42.80 | 40.42 | 38.62 | 39.77 | 39.28 | 38.17 | 40.00 | 41.61 | 40.94 | 41.90 | 42.29 | 44.32 | 42.15 | 44.81 | 43.90 | 45.17 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 17.15 + 43.50 – 15.05
= 45.60
The cash conversion cycle (CCC) of CVS Health Corp has shown a decreasing trend over the past few years based on the data provided. The CCC is a measure of the efficiency of a company's working capital management, representing the time it takes for a company to convert its investments in inventory and accounts receivable into cash flow from sales.
From December 31, 2022, to September 30, 2024, the CCC fluctuated within a range of 38.17 days to 45.60 days. This indicates some variability in the company's ability to manage its working capital efficiently during this period.
A lower CCC is generally preferred as it signifies that the company is able to collect cash from its sales and convert inventory into sales quickly. Therefore, the decreasing trend in the CCC from March 31, 2022, to June 30, 2024, suggests improved efficiency in CVS Health Corp's working capital management during this time frame.
Overall, the company should continue monitoring and improving its cash conversion cycle to ensure optimal use of its resources and maintain a healthy cash flow position.
Peer comparison
Dec 31, 2024