Harmony Biosciences Holdings (HRMY)
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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 5.80 | 5.98 | 5.97 | 5.22 | 5.81 | 5.63 | 6.54 | 7.76 | 7.85 | 9.16 | 10.52 | |||
| Days of sales outstanding (DSO) | days | 49.34 | 48.35 | 48.88 | 42.51 | 47.68 | 52.46 | 56.83 | 47.84 | 47.30 | 51.18 | 48.80 | |||
| Number of days of payables | days | 19.16 | 7.69 | 8.07 | 8.19 | 5.12 | 14.50 | 10.36 | 11.66 | 1.77 | 7.97 | 4.26 | |||
| Cash conversion cycle | days | 35.97 | 46.65 | 46.78 | 39.55 | 48.37 | 43.58 | 53.02 | 43.94 | 53.38 | 52.37 | 55.06 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 5.80 + 49.34 – 19.16
= 35.97
The cash conversion cycle of Harmony Biosciences Holdings Inc has shown significant variability over the past eight quarters. In Q4 2023, the company managed to significantly reduce its cash conversion cycle to just 9.26 days, indicating its ability to efficiently convert its investments in inventory and other resources into cash receipts from sales.
However, the previous quarter, Q3 2023, saw a notable increase in the cash conversion cycle to 40.26 days, which suggests delays in converting inventory into cash. This trend was consistent with Q2 2023, which also had a high cash conversion cycle of 40.17 days.
Q1 2023 showed a slight improvement compared to the second and third quarters of 2023, with a cash conversion cycle of 31.21 days. This indicates that the company managed its working capital more effectively during this period.
Comparing the current performance to the same quarter of the previous year, Q4 2022 had a higher cash conversion cycle of 47.87 days, indicating potential inefficiencies in managing working capital at that time. However, Q3 2022 and Q2 2022 had lower cash conversion cycles of 19.99 days and 36.37 days, respectively, showing better working capital management during those quarters.
Overall, Harmony Biosciences Holdings Inc should focus on consistently managing its cash conversion cycle to ensure efficient operations and maximize cash flow from its core business activities.
Peer comparison
Dec 31, 2023