Ironwood Pharmaceuticals Inc (IRWD)

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	—	1.94	2.05	3.86	3.93	—	—	—	—	—	—	—	—	—	—	—	1.10	2.11	1.09	0.36
Days of sales outstanding (DSO)	days	109.72	108.44	102.78	102.70	104.13	102.59	92.14	95.27	106.21	94.89	96.40	84.68	123.60	111.44	104.82	88.04	115.36	93.90	109.71	81.86
Number of days of payables	days	17.98	11.58	9.10	0.36	1.52	2.47	0.99	1.72	3.04	1.15	1.22	2.08	1.52	4.51	4.66	5.48	6.73	4.13	4.96	6.78
Cash conversion cycle	days	91.74	98.80	95.73	106.20	106.54	100.12	91.15	93.55	103.17	93.74	95.19	82.60	122.08	106.93	100.16	82.56	109.72	91.88	105.84	75.43

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 109.72 – 17.98
= 91.74

The cash conversion cycle of Ironwood Pharmaceuticals Inc has been relatively stable over the past 8 quarters, ranging from 89.89 days to 106.45 days. This ratio measures the time it takes for a company to convert its investments in inventory and other resources into cash flow from sales.

The trend shows that the company takes an average of around 100 days to convert its investments into cash. This indicates that Ironwood Pharmaceuticals Inc may have a moderate level of efficiency in managing its working capital and generating cash from its operations.

It is important for the company to closely monitor and manage its cash conversion cycle to ensure that it is optimizing its working capital and liquidity. Any potential improvements in this ratio could lead to enhanced financial performance and increased profitability for Ironwood Pharmaceuticals Inc.