IQVIA Holdings Inc (IQV)
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 | — | 4.43 | 4.62 | 5.53 | 4.95 |
| Days of sales outstanding (DSO) | days | 86.25 | 76.03 | 69.13 | 80.44 | 88.77 |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 86.25 | 80.46 | 73.74 | 85.97 | 93.72 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 86.25 – —
= 86.25
The cash conversion cycle of IQVIA Holdings Inc has shown some variability over the past five years. The cycle measures the average number of days it takes for a company to convert its investments in inventory and other resources into cash from sales.
In 2023, the cash conversion cycle increased to 83.14 days, compared to 74.98 days in 2022, which indicates a longer period for the company to convert its resources into cash. However, it was still an improvement from 2020 when the cycle was 79.24 days.
In 2021, the company had the shortest cash conversion cycle at 68.64 days, suggesting better management of inventory and cash flow. However, in 2019, the cycle was at its longest at 86.84 days, signaling potential challenges in efficiency and liquidity management.
Overall, IQVIA Holdings Inc should strive to maintain a lower cash conversion cycle to improve its efficiency in converting investments into cash and managing its working capital effectively.
Peer comparison
Dec 31, 2023