Quest Diagnostics Incorporated (DGX)

Cash conversion cycle

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Days of inventory on hand (DOH) days 11.19 10.79 10.66 10.90 10.87 10.13 10.27 10.90 11.54 11.35 11.17 13.21 14.02 14.03 11.20 9.08 8.91 8.16 7.72 7.24
Days of sales outstanding (DSO) days 48.53 51.08 48.21 48.35 44.76 46.07 45.27 47.57 49.39 49.18 41.71 48.99 58.79 62.03 54.57 46.33 50.22 53.37 52.45 52.25
Number of days of payables days 22.26 18.33 19.81 28.05 19.06
Cash conversion cycle days 37.46 61.88 58.87 59.25 37.29 56.20 55.54 58.46 41.12 60.53 52.88 62.20 44.77 76.06 65.77 55.42 40.07 61.53 60.16 59.48

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 some fluctuations over the past eight quarters. In Q4 2023, the company had a relatively efficient cash conversion cycle of 36.67 days, indicating that it was able to convert its investments in inventory and accounts receivable into cash within a shorter timeframe. This was an improvement compared to the previous quarter where the cash conversion cycle was 61.09 days, reflecting a longer period to convert investments into cash.

Looking at the trend over the past two years, there seems to be some seasonality in the cash conversion cycle, with Q4 typically exhibiting a more efficient cycle compared to the other quarters. However, there were periods, such as Q3 2022 and Q1 2022, where the cash conversion cycle was longer, indicating a delay in converting investments into cash.

Overall, Quest Diagnostics, Inc. should continue to monitor and manage its cash conversion cycle effectively to ensure optimal utilization of resources and liquidity management.


Peer comparison

Dec 31, 2023

Company name
Symbol
Cash conversion cycle
Quest Diagnostics Incorporated
DGX
37.46
Fulgent Genetics Inc
FLGT
47.36
Laboratory Corporation of America Holdings
LH
40.23
RadNet Inc
RDNT
-362.68