Humana Inc (HUM)
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 | 6.98 | 6.58 | 7.97 | 5.38 | 5.94 |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 6.98 | 6.58 | 7.97 | 5.38 | 5.94 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 6.98 – —
= 6.98
The cash conversion cycle of Humana Inc. has fluctuated over the past five years. In 2023, the company's cash conversion cycle was 6.98 days, showing a slight increase from the previous year. This indicates that Humana took almost 7 days to convert its investments in inventory and other resources into cash receipts from sales.
Comparing this to 2022 and 2021, where the cycle was 6.58 days and 7.97 days respectively, there seems to be some variability in how efficiently Humana is managing its working capital. The decrease in the cash conversion cycle from 2021 to 2022 suggests an improvement in the company's efficiency in collecting cash from sales and managing inventory levels.
Looking back further, in 2020 and 2019, the cash conversion cycle was 5.38 days and 5.94 days respectively. These lower figures indicate that Humana was able to convert its resources into cash at a faster rate in those years, suggesting a more efficient working capital management process.
Overall, it is essential for Humana to monitor its cash conversion cycle continuously to ensure optimal management of working capital and efficiency in its cash flow operations.
Peer comparison
Dec 31, 2023