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