Krystal Biotech Inc (KRYS)
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 | 25.91 | — | — | — | — |
| Days of sales outstanding (DSO) | days | 275.17 | — | — | — | — |
| Number of days of payables | days | 15.33 | 18.69 | 75.89 | 51.01 | 55.70 |
| Cash conversion cycle | days | 285.75 | -18.69 | -75.89 | -51.01 | -55.70 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 25.91 + 275.17 – 15.33
= 285.75
The cash conversion cycle for Krystal Biotech Inc has shown significant fluctuations over the last five years. In 2023, the company's cash conversion cycle increased sharply to 285.75 days, indicating that it takes the company a longer time to convert its inventory and receivables into cash. This may be a concern as it suggests a potential liquidity issue or inefficiencies in managing working capital.
In contrast, in 2022, the company had a negative cash conversion cycle of -18.69 days, meaning that Krystal Biotech Inc was able to convert its inventory and receivables into cash more quickly than it paid its suppliers. This suggests efficient working capital management and potentially strong liquidity position during that period.
Looking back at 2021, 2020, and 2019, the company also had negative cash conversion cycles, indicating efficient working capital management in those years. However, the cycle seemed to be slightly deteriorating in 2020 and 2021 compared to 2019, as the days were becoming more negative.
Overall, the recent sharp increase in the cash conversion cycle in 2023 raises a red flag and warrants further investigation into the company's working capital management practices and potential liquidity constraints. It is crucial for Krystal Biotech Inc to closely monitor and improve its cash conversion cycle to ensure optimal cash flow management and sustainable operations in the future.
Peer comparison
Dec 31, 2023