Danaher Corporation (DHR)

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	52.59	50.88	53.06	57.02	46.32	54.44	55.55	53.21	49.39	50.83	48.45	47.74	48.58	60.62	67.62	68.02	42.02	50.91	56.98	62.70
Days of sales outstanding (DSO)	days	52.03	52.07	50.79	51.09	57.20	51.72	—	—	57.81	—	—	—	67.16	—	—	—	—	—	—	—
Number of days of payables	days	35.81	31.87	32.61	35.08	38.46	36.86	—	—	45.86	—	—	—	43.43	—	—	—	—	—	—	—
Cash conversion cycle	days	68.82	71.09	71.25	73.04	65.06	69.30	55.55	53.21	61.34	50.83	48.45	47.74	72.31	60.62	67.62	68.02	42.02	50.91	56.98	62.70

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 52.59 + 52.03 – 35.81
= 68.82

The cash conversion cycle of Danaher Corp. has shown some fluctuations over the past eight quarters. In Q4 2023, the company's cash conversion cycle was 90.59 days, slightly higher compared to the previous quarter at 85.63 days. This indicates that Danaher Corp. took longer to convert its investments in inventory and other resources into cash in Q4 2023.

Looking at the trend over the past two years, the cash conversion cycle has generally been in the range of 75 to 90 days. It reached its lowest point in Q1 2022 at 75.09 days and peaked in Q4 2023 at 90.59 days. This variation suggests that Danaher Corp. may have experienced challenges in efficiently managing its working capital during certain periods.

Overall, it is important for Danaher Corp. to focus on optimizing its cash conversion cycle to enhance its liquidity and efficiency in converting investments into cash. Maintaining a lower cash conversion cycle can help the company improve its financial health and operational performance in the long run.