Inspire Medical Systems Inc (INSP)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Days of inventory on hand (DOH)	days	44.36	39.07	35.56	30.70	22.42	17.75	15.25	12.84	11.16	15.32	25.69	30.09	26.55	24.88	24.47	25.27	21.15	26.66	45.03	53.17
Days of sales outstanding (DSO)	days	42.31	43.35	41.23	39.95	52.51	45.74	44.11	46.89	55.02	51.14	49.33	48.44	53.94	48.82	52.39	59.49	80.39	81.33	46.55	46.49
Number of days of payables	days	21.42	20.24	20.25	27.46	25.70	27.22	29.23	29.90	25.21	20.53	18.85	23.07	17.97	15.96	15.98	20.10	17.99	20.05	23.06	42.72
Cash conversion cycle	days	65.25	62.19	56.53	43.19	49.23	36.28	30.12	29.83	40.97	45.92	56.18	55.46	62.52	57.75	60.88	64.66	83.56	87.94	68.53	56.94

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 fluctuations over the past few years.

The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle generally indicates that a company efficiently manages its working capital.

From March 2020 to December 2020, the cash conversion cycle increased from 56.94 days to 83.56 days, indicating a slower conversion of inventory into cash during this period. However, the cycle improved in the following quarters, reaching a low of 29.83 days by March 2023, suggesting increased efficiency in managing working capital and generating cash flows.

Subsequently, the cash conversion cycle slightly increased and fluctuated between 30.12 days and 65.25 days from June 2023 to December 2024. Overall, the company seems to have maintained a relatively efficient cash conversion cycle during this period.

It is essential for Inspire Medical Systems Inc to continue monitoring and managing its cash conversion cycle effectively to ensure optimal working capital management and sustainable cash flow generation.