Quest Diagnostics Incorporated (DGX)
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 | 10.35 | 11.19 | 10.87 | 11.54 | 14.02 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 10.35 | 11.19 | 10.87 | 11.54 | 14.02 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 10.35 + — – —
= 10.35
The cash conversion cycle of Quest Diagnostics Incorporated has shown a decreasing trend over the past five years, starting at 14.02 days on December 31, 2020, and reaching 10.35 days by December 31, 2024. This indicates that the company has been managing its cash flow more efficiently, converting its investments in inventory and accounts receivable into cash at a faster rate.
A lower cash conversion cycle is typically a positive sign for a company, as it suggests that Quest Diagnostics is able to collect payments from customers quickly, manage its inventory effectively, and pay its suppliers in a timely manner. This efficiency in cash management can lead to improved liquidity and financial performance for the company.
Overall, the decreasing trend in the cash conversion cycle for Quest Diagnostics reflects its efforts to optimize working capital management and enhance operational efficiency in converting its resources into cash. It signifies a positive development in the company's cash flow dynamics over the years.
Peer comparison
Dec 31, 2024