Fulgent Genetics Inc (FLGT)

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 11.51 9.17 9.66 7.77 6.20 10.56 17.91 17.67 20.67 39.05 49.27 58.66 67.02 155.46 40.77 36.77 7.17 6.73 12.35 14.17
Days of sales outstanding (DSO) days 66.20 64.22 42.41 44.38 42.80 47.67 53.12 61.93 51.60 43.21 60.19 102.18 174.55 267.68 116.02 66.94 73.73 65.12 81.11 75.75
Number of days of payables days 30.34 29.64 36.00 36.35 33.44 20.37 55.65 39.47 34.71 44.24 28.63 39.83 107.65 163.58 68.79 68.58 40.91 59.26 35.83 48.79
Cash conversion cycle days 47.36 43.74 16.08 15.80 15.56 37.86 15.38 40.14 37.56 38.02 80.83 121.01 133.92 259.56 88.00 35.14 39.99 12.58 57.63 41.14

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 11.51 + 66.20 – 30.34
= 47.36

The cash conversion cycle of Fulgent Genetics Inc has shown fluctuations over the past eight quarters, ranging from a low of 16.44 days in Q2 2022 to a high of 49.14 days in Q3 2023.

In general, a lower cash conversion cycle indicates that the company is able to efficiently convert its investments in inventory and accounts receivable into cash. Conversely, a higher cash conversion cycle may suggest inefficiencies in managing working capital, leading to longer periods between cash outflows for inventory and cash inflows from sales.

The trend in Fulgent Genetics Inc's cash conversion cycle indicates variability in its working capital management efficiency over the quarters. The company experienced a significant increase in the cash conversion cycle in Q3 2023 compared to the previous quarters, which may be a cause for concern as it suggests delays in collecting cash from customers or difficulties in managing inventory levels.

It is important for the company to closely monitor its cash conversion cycle and identify areas for improvement to ensure optimal utilization of working capital and maintain healthy cash flow operations.