Healthcare Services Group Inc (HCSG)
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 | 4.13 | 4.25 | 4.45 | 4.51 | 4.71 | 5.01 | 5.22 | 5.58 | 5.96 | 6.23 | 6.54 | 6.63 | 7.00 | 7.12 | 7.21 | 7.86 | 7.54 | 7.88 | 7.91 | 7.97 |
| Days of sales outstanding (DSO) | days | 84.08 | 80.99 | 83.17 | 76.66 | 74.13 | 76.27 | 72.48 | 71.18 | 67.18 | 64.30 | 59.42 | 53.68 | 52.97 | 56.68 | 59.75 | 61.14 | 67.60 | 67.51 | 65.19 | 64.99 |
| Number of days of payables | days | 18.59 | 15.65 | 14.63 | 14.36 | 15.19 | 14.89 | 14.73 | 14.39 | 14.76 | 11.78 | 11.98 | 10.85 | 11.58 | 11.74 | 12.70 | 12.93 | 11.24 | 12.03 | 11.73 | 11.71 |
| Cash conversion cycle | days | 69.61 | 69.60 | 72.99 | 66.81 | 63.65 | 66.39 | 62.96 | 62.37 | 58.38 | 58.75 | 53.98 | 49.45 | 48.40 | 52.05 | 54.25 | 56.06 | 63.90 | 63.37 | 61.37 | 61.25 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 4.13 + 84.08 – 18.59
= 69.61
The cash conversion cycle for Healthcare Services Group, Inc. has shown some fluctuations over the past eight quarters. The company's cash conversion cycle measures the average number of days it takes for the company to convert its investments in inventory and other resources into cash inflows from sales.
In Q4 2023, the cash conversion cycle was 67.53 days, slightly lower than the previous quarter at 67.83 days. This indicates that the company was able to convert its investments into cash more efficiently in Q4 2023 compared to Q3 2023.
Looking further back, in Q2 2023, the cash conversion cycle increased to 71.72 days, which was the highest recorded in the provided data. This suggests that the company took longer to convert its investments into cash during that period.
Comparing the Q4 results to the same quarter in the previous year (Q4 2022), there has been an overall upward trend in the cash conversion cycle. This indicates that the company may be facing challenges in managing its working capital efficiently and converting investments into cash.
Overall, Healthcare Services Group, Inc. should analyze the reasons behind these fluctuations in the cash conversion cycle to identify opportunities for improvement in its working capital management and cash flow efficiency.