Edwards Lifesciences Corp (EW)

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	132.86	123.92	124.14	121.41	120.47	101.67	97.66	95.38	96.43	101.63	108.21	118.46	126.51	122.06	115.51	99.79	99.06	99.20	106.37	112.18
Days of sales outstanding (DSO)	days	47.17	46.37	48.71	47.73	43.77	42.09	43.47	43.46	40.72	43.04	47.47	47.82	42.75	45.85	—	—	45.56	—	—	—
Number of days of payables	days	22.91	22.88	24.44	24.01	27.78	20.78	21.45	20.73	27.14	19.22	20.60	23.20	30.98	25.65	24.10	22.83	27.88	22.06	25.70	26.17
Cash conversion cycle	days	157.13	147.41	148.40	145.13	136.46	122.97	119.69	118.10	110.01	125.46	135.08	143.08	138.28	142.26	91.41	76.96	116.74	77.14	80.67	86.00

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 been fluctuating over the past eight quarters, ranging from a high of 306.62 days in Q4 2023 to a low of 213.08 days in Q1 2022. The trend shows some variability with periods of increase and decrease.

The company's cash conversion cycle represents the time it takes for the company to convert its investments in inventory into cash receipts from customers. A longer cash conversion cycle may indicate inefficiencies in managing inventory, collecting receivables, or delaying payables.

During Q4 2023, the cash conversion cycle increased to 306.62 days, reflecting a longer time to convert inventory and receivables into cash. This could be a concern as it may tie up cash resources and impact the company's liquidity.

In Q1 2022, the cash conversion cycle was at its lowest point of 213.08 days, indicating an efficient management of working capital and quicker conversion of investments into cash. This could suggest improved operational efficiency and stronger cash flow generation.

Overall, the fluctuating cash conversion cycle of Edwards Lifesciences Corp highlights the importance of closely monitoring working capital management to optimize cash flow and ensure efficient operations.