Edwards Lifesciences Corp (EW)

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	132.86	118.02	96.43	126.51	99.06
Days of sales outstanding (DSO)	days	47.17	43.77	40.72	42.86	45.79
Number of days of payables	days	22.91	27.22	27.14	30.98	27.88
Cash conversion cycle	days	157.13	134.57	110.01	138.38	116.97

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 132.86 + 47.17 – 22.91
= 157.13

The cash conversion cycle of Edwards Lifesciences Corp has fluctuated over the past five years, as indicated by the data provided. In 2023, the cash conversion cycle was 306.62 days, representing an increase from the previous year. This suggests that the company took longer to convert its investments in inventory into cash receipts from sales, potentially indicating inefficiencies in its working capital management.

In 2022, the cash conversion cycle decreased to 274.98 days, showing an improvement compared to 2021 when it was 199.00 days. This reduction may indicate better inventory management or quicker collection of receivables, leading to a more efficient cash conversion process during that period.

However, in 2020, the cash conversion cycle increased to 254.79 days compared to 2019 when it was at 201.12 days, suggesting a slowdown in the company's cash conversion efficiency.

Overall, the trend in Edwards Lifesciences Corp's cash conversion cycle exhibits some volatility, with fluctuations observed in the company's working capital management effectiveness over the past five years. Further analysis and monitoring of the components contributing to the cash conversion cycle would be necessary to assess the company's operational efficiency and liquidity position accurately.