Innoviva Inc (INVA)

Cash conversion cycle

		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	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	123.89	136.01	166.16	210.28	295.10	509.67	59.51	—	—	—	—	—	—	—	—	—	—	—	—	—
Days of sales outstanding (DSO)	days	87.23	78.38	90.59	75.20	69.49	71.28	111.11	95.25	108.40	103.89	109.73	99.89	107.66	108.99	105.32	110.77	117.35	100.67	100.12	84.28
Number of days of payables	days	20.43	12.70	16.29	25.13	15.52	27.39	65.08	39.53	0.61	1.75	0.58	0.30	1.74	21.16	5.72	3.14	0.25	0.85	29.66	3.73
Cash conversion cycle	days	190.70	201.69	240.47	260.36	349.07	553.56	105.54	55.72	107.79	102.14	109.16	99.59	105.92	87.83	99.60	107.63	117.10	99.82	70.46	80.55

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 123.89 + 87.23 – 20.43
= 190.70

The cash conversion cycle for Innoviva Inc has shown significant fluctuations over the past few quarters. In Q1 2022 and Q2 2022, the company had a cash conversion cycle of 0 days, indicating that it was able to effectively manage its working capital and quickly convert inventory into cash. However, in subsequent quarters, the cash conversion cycle increased significantly, reaching a peak of 6,652.17 days in Q3 2022. This prolonged cycle suggests that the company faced challenges in efficiently managing its operating cycle, leading to delays in converting inventory into receivables and eventually into cash.

In recent quarters, there has been some improvement in the cash conversion cycle, with a decreasing trend from Q3 2022 to Q4 2023. The cycle reduced from 6,652.17 days to 308.21 days, indicating that the company may have implemented measures to streamline its working capital management and enhance its operational efficiency.

Overall, Innoviva Inc's cash conversion cycle has been volatile, with periods of inefficiency followed by improvements. It is important for the company to continuously monitor and optimize its working capital processes to ensure a more stable and sustainable cash conversion cycle in the future.