Gilead Sciences Inc (GILD)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	99.85	112.38	181.95	151.18	240.62
Days of sales outstanding (DSO)	days	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—
Cash conversion cycle	days	99.85	112.38	181.95	151.18	240.62

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 99.85 + — – —
= 99.85

The cash conversion cycle of Gilead Sciences Inc has shown fluctuations over the past five years. As of December 31, 2020, the company's cash conversion cycle was reported at 240.62 days, indicating that it took Gilead Sciences approximately 240 days to convert its investments in inventory and accounts receivable into cash.

By December 31, 2021, there was a notable improvement in the cash conversion cycle, decreasing to 151.18 days. This reduction suggests that Gilead Sciences was able to manage its inventory and accounts receivable more efficiently, leading to a quicker conversion into cash.

However, by the end of December 31, 2022, the cash conversion cycle slightly increased to 181.95 days, indicating a longer period required for the company to convert its investments into cash compared to the previous year.

The trend changed positively in the subsequent years, with the cash conversion cycle decreasing to 112.38 days by December 31, 2023, followed by a further improvement to 99.85 days by December 31, 2024. These reductions in the cash conversion cycle indicate that Gilead Sciences became more efficient in managing its working capital, resulting in a quicker turnaround time from investing in inventory and accounts receivable to generating cash.

Overall, the trend shows some fluctuations in the cash conversion cycle of Gilead Sciences Inc over the five-year period, with notable improvements in recent years, reflecting the company's efforts in optimizing its working capital management.