HealthStream Inc (HSTM)
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 | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 50.29 | 58.42 | 49.65 | 68.73 | 43.63 |
| Number of days of payables | days | 14.18 | 13.25 | 9.38 | 18.12 | 8.58 |
| Cash conversion cycle | days | 36.10 | 45.17 | 40.28 | 50.61 | 35.05 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 50.29 – 14.18
= 36.10
The cash conversion cycle of Healthstream Inc has shown a fluctuating trend over the past five years. In 2023, the company's cash conversion cycle improved to 21.61 days from 29.24 days in 2022, indicating that the company took fewer days to convert its investments in inventory and other resources into cash during the year.
Comparing the current cycle to previous years, we see that Healthstream Inc's cash conversion cycle was lower in 2023 compared to 2021 and 2020, which is a positive sign of the company managing its working capital more efficiently. However, it was slightly higher than the cycle in 2019.
Overall, the downward trend in the cash conversion cycle over the last five years suggests that the company has been successful in managing its working capital effectively, leading to improved liquidity and potentially better financial performance.
Peer comparison
Dec 31, 2023