Jazz Pharmaceuticals PLC (JAZZ)

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	111.65	121.21	197.97	27.86	26.28
Days of sales outstanding (DSO)	days	67.62	66.62	68.55	63.35	61.95
Number of days of payables	days	19.21	15.41	18.51	7.87	15.29
Cash conversion cycle	days	160.05	172.42	248.01	83.34	72.94

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 111.65 + 67.62 – 19.21
= 160.05

The cash conversion cycle of Jazz Pharmaceuticals plc has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle decreased to 481.39 days from 485.89 days in 2022, indicating an improvement in the company's efficiency in converting its investments in inventory and accounts receivable into cash.

Compared to the significant increase seen in 2021, where the cash conversion cycle spiked to 871.73 days, the recent decline suggests that Jazz Pharmaceuticals has managed its working capital more effectively in 2023. However, the company's cash conversion cycle in 2023 remains higher than the levels observed in 2020 and 2019, indicating that there is still room for further improvement in managing its liquidity and operational efficiency.

Overall, the trend in Jazz Pharmaceuticals plc's cash conversion cycle shows a mix of fluctuation and improvement over the past five years, with the company striving to streamline its processes and optimize its working capital management for enhanced financial performance.