Intuitive Surgical Inc (ISRG)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	111.36	101.75	85.93	66.03	79.45
Days of sales outstanding (DSO)	days	49.91	54.16	52.51	47.85	51.83
Number of days of payables	days	14.48	15.73	14.14	13.63	10.78
Cash conversion cycle	days	146.79	140.18	124.30	100.25	120.50

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 111.36 + 49.91 – 14.48
= 146.79

The cash conversion cycle of Intuitive Surgical Inc has shown some fluctuations over the past five years. In 2020, the company's cash conversion cycle was 120.50 days, indicating that it took approximately 120.50 days for the company to convert its investments in inventory and accounts receivable into cash.

By the end of 2021, the cash conversion cycle improved to 100.25 days, suggesting that the company was able to manage its working capital more efficiently, reducing the time it takes to convert its investments into cash. However, in 2022, the cash conversion cycle increased to 124.30 days, indicating that the company may have faced challenges in managing its working capital effectively.

Subsequently, by the end of 2023, the cash conversion cycle further extended to 140.18 days, signifying a potential slowdown in the company's cash conversion process. This trend continued in 2024, with the cash conversion cycle reaching 146.79 days, reflecting a longer time period required for Intuitive Surgical Inc to convert its investments into cash.

Overall, the fluctuation in the cash conversion cycle of Intuitive Surgical Inc over the past five years highlights the importance of effectively managing working capital to optimize cash flow and operational efficiency. Continued monitoring and improvement in the cash conversion cycle can contribute to the company's financial health and long-term sustainability.