HCA Holdings Inc (HCA)
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 | 24.60 | 26.70 | 26.51 | 30.30 | 28.09 |
| Days of sales outstanding (DSO) | days | 55.95 | 53.88 | 50.29 | 49.94 | 52.47 |
| Number of days of payables | days | 51.53 | 54.73 | 54.89 | 52.89 | 44.14 |
| Cash conversion cycle | days | 29.02 | 25.85 | 21.92 | 27.35 | 36.43 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 24.60 + 55.95 – 51.53
= 29.02
The cash conversion cycle of HCA Healthcare Inc has shown a slight increase over the past five years, from 52.47 days in 2019 to 55.95 days in 2023. This indicates that the company takes longer to convert its investment in inventory into cash.
The upward trend in the cash conversion cycle could suggest potential inefficiencies in the company's operations related to managing inventory, accounts receivable, and accounts payable. It is essential for HCA Healthcare Inc to closely monitor and manage these components to optimize its working capital management.
Overall, the increasing trend in the cash conversion cycle warrants further analysis to identify areas for operational improvement and efficiency enhancements within HCA Healthcare Inc.
Peer comparison
Dec 31, 2023