Hims Hers Health Inc (HIMS)
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 | 52.21 | 66.59 | 73.44 | 32.90 | 40.56 |
| Days of sales outstanding (DSO) | days | 2.80 | 2.70 | 5.50 | 2.70 | — |
| Number of days of payables | days | 100.10 | 99.94 | 106.38 | 74.90 | 0.17 |
| Cash conversion cycle | days | -45.09 | -30.65 | -27.44 | -39.30 | 40.38 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 52.21 + 2.80 – 100.10
= -45.09
The cash conversion cycle of Hims Hers Health Inc has shown variability over the past five years. In 2023, the company experienced a negative cash conversion cycle of -45.09 days, indicating that it was able to convert its inventory and accounts receivable into cash more efficiently than in the previous years. This was an improvement from 2022 when the cycle was -30.65 days.
In 2021, the company further improved its cash conversion cycle to -27.44 days, suggesting a more streamlined process of converting its resources into cash compared to 2020 when the cycle was -39.30 days. Notably, in 2019, the company had a positive cash conversion cycle of 40.38 days, indicating a less efficient management of cash, inventory, and receivables.
Overall, the trend shows that Hims Hers Health Inc has made significant progress in optimizing its cash conversion cycle over the years, leading to improved liquidity and operational efficiency.