Henry Schein Inc (HSIC)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 54.82 | 56.46 | 59.94 | 58.10 | 56.87 |
| Days of sales outstanding (DSO) | days | 42.68 | 55.50 | 41.76 | 42.79 | 51.59 |
| Number of days of payables | days | 29.13 | 31.73 | 30.66 | 32.91 | 37.81 |
| Cash conversion cycle | days | 68.37 | 80.23 | 71.04 | 67.99 | 70.65 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 54.82 + 42.68 – 29.13
= 68.37
The cash conversion cycle is a key metric that measures how long it takes for a company to convert its investments in inventory and other resources into cash inflows from sales. For Henry Schein Inc, the trend in the cash conversion cycle from December 31, 2020, to December 31, 2024, shows fluctuations.
- On December 31, 2020, the cash conversion cycle was 70.65 days, indicating that it took approximately 70.65 days for the company to convert its resources into cash.
- By December 31, 2021, the cash conversion cycle had slightly improved to 67.99 days, suggesting a more efficient cycle.
- However, by December 31, 2022, the cycle increased to 71.04 days, which could indicate challenges in managing inventory or collections.
- The cycle further increased significantly to 80.23 days by December 31, 2023, signaling potential issues in the company's working capital management.
- In the most recent period ending December 31, 2024, the cash conversion cycle improved to 68.37 days, showing some recovery in converting resources to cash.
Overall, Henry Schein Inc's cash conversion cycle has shown fluctuating trends over the past five years, and the company may need to focus on optimizing its working capital efficiency to improve cash flow generation and operational performance.
Peer comparison
Dec 31, 2024