Quest Diagnostics Incorporated (DGX)
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 | 11.19 | 10.87 | 11.54 | 14.02 | 8.91 |
| Days of sales outstanding (DSO) | days | 48.53 | 44.76 | 49.39 | 58.79 | 50.22 |
| Number of days of payables | days | 22.26 | 18.33 | 19.81 | 28.05 | 19.06 |
| Cash conversion cycle | days | 37.46 | 37.29 | 41.12 | 44.77 | 40.07 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 11.19 + 48.53 – 22.26
= 37.46
Quest Diagnostics, Inc.'s cash conversion cycle has shown a slight improvement over the past two years, decreasing from 40.39 days in 2021 to 36.67 days in 2023. This indicates that the company is managing its cash flow more efficiently, potentially by reducing the time it takes to convert its investments in inventory and accounts receivable into cash. The trend of decreasing the cash conversion cycle is generally a positive sign for the company, as it suggests improved liquidity and working capital management. However, it's important to monitor this metric over time to ensure sustained efficiency in cash flow operations.
Peer comparison
Dec 31, 2023