Inspire Medical Systems Inc (INSP)

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	44.36	22.43	11.16	26.53	21.15
Days of sales outstanding (DSO)	days	42.31	52.51	55.02	53.94	80.70
Number of days of payables	days	21.42	25.71	25.21	17.96	17.99
Cash conversion cycle	days	65.25	49.23	40.97	62.51	83.86

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 44.36 + 42.31 – 21.42
= 65.25

The cash conversion cycle of Inspire Medical Systems Inc has shown a decreasing trend over the years. As of December 31, 2020, the company's cash conversion cycle was 83.86 days, indicating that it took the company almost three months to convert its investments in inventory and accounts receivable back into cash.

By December 31, 2024, the cash conversion cycle had improved to 65.25 days, suggesting that the company has been able to manage its cash flow more efficiently. However, it's worth noting that there was a slight increase in the cash conversion cycle from 2022 to 2023, which may require further investigation to understand the underlying reasons for this fluctuation.

Overall, the decreasing trend in the cash conversion cycle reflects an improvement in the company's ability to convert its operational activities into cash, which is a positive sign for its financial health and working capital management.