DaVita HealthCare Partners Inc (DVA)
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 | 23.26 | 19.08 | 20.90 | 21.69 | 19.39 |
| Days of sales outstanding (DSO) | days | 72.64 | 80.19 | 75.73 | 77.07 | 73.88 |
| Number of days of payables | days | 83.64 | 83.88 | 78.23 | 84.40 | 79.96 |
| Cash conversion cycle | days | 12.26 | 15.39 | 18.40 | 14.36 | 13.31 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 23.26 + 72.64 – 83.64
= 12.26
The cash conversion cycle for DaVita Inc has shown varying trends over the past five years. It was 72.64 days at the end of 2023, which indicates that on average, it takes the company approximately 72.64 days to convert its investments in inventory into cash received from sales. This is an improvement compared to the previous year, where the cycle was 80.19 days, suggesting that DaVita Inc has become more efficient in managing its working capital.
Looking back further, in 2021 the cash conversion cycle was 75.73 days, slightly lower than in 2020 (77.07 days) but higher than in 2019 (73.88 days). This fluctuation in the cycle indicates some variability in the company's ability to manage its cash flow efficiency over the years.
Overall, a decreasing trend in the cash conversion cycle is generally considered positive as it signifies that the company is efficiently managing its operations, inventory, and receivables, ultimately leading to quicker cash generation from its sales activities. However, it is essential for the company to maintain a balance between inventory management and timely collection of receivables to sustain this improved performance in the future.
Peer comparison
Dec 31, 2023