DexCom Inc (DXCM)
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 | 80.62 | 54.10 | 82.41 | 67.49 | 40.89 |
Days of sales outstanding (DSO) | days | 100.03 | 95.03 | 80.44 | 85.82 | 74.81 |
Number of days of payables | days | 39.82 | 41.96 | 45.20 | 46.96 | 34.92 |
Cash conversion cycle | days | 140.83 | 107.16 | 117.64 | 106.35 | 80.79 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 80.62 + 100.03 – 39.82
= 140.83
The cash conversion cycle of Dexcom Inc has fluctuated over the past five years, indicating varying efficiency in managing its working capital. The cycle increased from 82.53 days in 2019 to 177.03 days in 2023, reaching its highest point during this period. This suggests a potential slowdown in the company's cash conversion process, possibly due to extended periods for inventory turnover, accounts receivable collection, or both. The peak in 2023 could be a cause for concern, as it indicates a longer time span for converting investments in inventory and accounts receivable into cash, which could impact liquidity and cash flow management. Further analysis is necessary to identify the specific factors contributing to this prolonged cash conversion cycle and to implement strategies for improvement.
Peer comparison
Dec 31, 2023