The Ensign Group Inc (ENSG)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | 2.68 | — | — | — | — | — | — | 0.67 | — | — | — | — | — | — | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 48.85 | 49.27 | 50.41 | 49.25 | 47.45 | 48.49 | 48.05 | 50.66 | 49.27 | 44.39 | 44.05 | 45.73 | 45.67 | 44.64 | 45.85 | 46.71 | 46.34 | 51.28 | 52.72 | 57.91 |
| Number of days of payables | days | 10.02 | 9.31 | 9.47 | 9.10 | 10.57 | 9.40 | 10.04 | 11.14 | 11.19 | 9.59 | 9.47 | 9.22 | 9.76 | 9.83 | 10.35 | 9.70 | 9.29 | 10.65 | 8.86 | 8.47 |
| Cash conversion cycle | days | 38.83 | 42.64 | 40.94 | 40.15 | 36.88 | 39.09 | 38.01 | 39.52 | 38.75 | 34.79 | 34.58 | 36.51 | 35.91 | 34.81 | 35.51 | 37.01 | 37.05 | 40.64 | 43.85 | 49.44 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 48.85 – 10.02
= 38.83
The cash conversion cycle of The Ensign Group Inc has exhibited some fluctuations over the past few years based on the provided data. The trend indicates a general improvement in efficiency as the days taken to convert resources invested in the operations into cash have decreased gradually.
In the most recent period, as of December 31, 2024, the cash conversion cycle stood at 38.83 days, which suggests that the company takes about 38.83 days to convert its investments in inventory and accounts receivables into cash.
Analyzing the historical data, we observe a gradual reduction in the cash conversion cycle from 49.44 days on March 31, 2020, to the current 38.83 days on December 31, 2024. This indicates that the company has been managing its working capital more effectively, possibly through better inventory management, efficient accounts receivable collection, or extending payment terms to suppliers.
However, it is worth noting a slight increase in the cash conversion cycle in the most recent period compared to the previous quarters. This increase may suggest potential challenges in managing working capital efficiently, which could impact liquidity and overall financial health if not addressed timely.
Overall, monitoring the cash conversion cycle is crucial for assessing the company's ability to generate cash from its core operations and manage working capital effectively. It provides insights into operational efficiency and financial performance, highlighting areas that may require closer attention to maintain or improve liquidity and profitability.
Peer comparison
Dec 31, 2024