Inspire Medical Systems Inc (INSP)

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	22.43	11.16	26.53	21.15	156.08
Days of sales outstanding (DSO)	days	52.51	55.02	53.94	80.70	58.41
Number of days of payables	days	25.71	25.21	17.96	17.99	119.29
Cash conversion cycle	days	49.23	40.97	62.51	83.86	95.20

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 22.43 + 52.51 – 25.71
= 49.23

The cash conversion cycle of Inspire Medical Systems Inc has fluctuated over the past five years. The company's cash conversion cycle decreased from 95.20 days in 2019 to 40.97 days in 2022, indicating a significant improvement in managing its working capital and converting inventory and receivables into cash more efficiently. However, in 2023, the cash conversion cycle increased to 49.23 days, suggesting a slight deterioration in the efficiency of cash flow conversion.

Overall, the trend in the cash conversion cycle from 2019 to 2023 shows a mix of improvement and slight deterioration. It is essential for the company to monitor and manage its working capital effectively to ensure a more stable and efficient cash conversion cycle in the future. Further analysis of the components of the cash conversion cycle, such as accounts receivable turnover, inventory turnover, and accounts payable turnover, could provide more insights into the company's working capital management.