Inspire Medical Systems Inc (INSP)

Cash conversion cycle

		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	Dec 31, 2019
Days of inventory on hand (DOH)	days	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	156.08
Days of sales outstanding (DSO)	days	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	58.41
Number of days of payables	days	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	119.29
Cash conversion cycle	days	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	95.20

September 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 39.07 + 43.35 – 20.24
= 62.19

The cash conversion cycle of Inspire Medical Systems Inc has been fluctuating over the past few quarters. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources to cash flows from sales. A shorter cash conversion cycle is generally favorable as it indicates efficient management of working capital.

From the data provided, we can observe that the cash conversion cycle for Inspire Medical Systems Inc ranged from a low of 29.83 days to a high of 95.20 days over the past eight quarters. The trend shows a general pattern of fluctuation, with some quarters exhibiting shorter cycles and others longer cycles.

Analyzing the data, we note that the cash conversion cycle was relatively stable in 2020 and early 2021, with figures ranging around 60-65 days. However, there was a significant increase in the cycle in late 2021, reaching 83.56 days in December 2021 and peaking at 95.20 days in March 2020. This spike may indicate challenges in managing working capital efficiently during that period.

In the most recent quarters, the cash conversion cycle has shown some improvement, with the cycle decreasing to 43.19 days in March 2024 and further dropping to 36.28 days in September 2023. This may suggest that the company has made efforts to streamline its operations and manage its working capital more effectively.

Overall, while the cash conversion cycle of Inspire Medical Systems Inc has experienced fluctuations, a downward trend in recent quarters is a positive sign. Continued monitoring of the cash conversion cycle will be crucial for assessing the company's efficiency in managing its working capital and converting investments into cash flows.