Hologic Inc (HOLX)
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 | 118.71 | 115.08 | 127.14 | 140.33 | 134.67 | 122.04 | 110.76 | 99.54 | 100.00 | 99.62 | 104.11 | 100.72 | 98.21 | 93.10 | 86.26 | 81.33 | 62.71 | 73.93 | 86.58 | 82.87 |
| Days of sales outstanding (DSO) | days | 61.69 | 56.66 | 62.08 | — | 56.75 | 47.90 | 50.52 | 57.52 | 70.23 | 61.09 | 60.80 | 83.22 | 97.86 | 99.44 | 80.64 | 65.56 | 62.70 | 70.32 | 64.61 | 61.91 |
| Number of days of payables | days | 34.44 | 32.64 | 33.76 | 38.25 | 40.10 | 38.69 | 41.28 | 42.53 | 39.01 | 42.91 | 43.14 | 49.70 | 43.07 | 42.13 | 26.55 | 27.24 | 20.37 | 30.99 | 29.88 | 30.87 |
| Cash conversion cycle | days | 145.96 | 139.09 | 155.46 | 102.09 | 151.32 | 131.26 | 120.01 | 114.53 | 131.22 | 117.80 | 121.76 | 134.24 | 153.00 | 150.41 | 140.35 | 119.66 | 105.03 | 113.26 | 121.30 | 113.91 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 118.71 + 61.69 – 34.44
= 145.96
The cash conversion cycle of Hologic Inc fluctuated over the past five years, indicating variability in its efficiency in managing cash flows and working capital. The company's cash conversion cycle ranged from a low of 102.09 days to a high of 155.46 days during this period.
It is important to note that a lower cash conversion cycle is generally preferred as it signifies that the company is able to quickly convert its investments in inventory back into cash. A longer cash conversion cycle may indicate inefficiencies in inventory management, accounts receivable collection, or accounts payable turnover.
Hologic Inc experienced a significant increase in its cash conversion cycle in the most recent quarter, reaching 145.96 days, which suggests a potential slowdown in the company's ability to convert its resources into cash. This warrants further analysis to understand the underlying reasons for this increase and to implement strategies to improve cash flow efficiency.
Overall, monitoring and analyzing the cash conversion cycle of Hologic Inc can provide valuable insights into the company's working capital management and operational efficiency, allowing stakeholders to make informed decisions regarding liquidity and financial performance.
Peer comparison
Dec 31, 2023