LivaNova PLC (LIVN)
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 | 57.34 | 57.94 | 49.97 | 46.67 | 41.82 |
| Days of sales outstanding (DSO) | days | 57.64 | 71.76 | 68.62 | 73.24 | 75.20 |
| Number of days of payables | days | 27.09 | 31.67 | 28.70 | 29.98 | 26.72 |
| Cash conversion cycle | days | 87.89 | 98.02 | 89.89 | 89.92 | 90.30 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 57.34 + 57.64 – 27.09
= 87.89
The cash conversion cycle is a key metric for assessing how efficiently a company manages its cash flows from operating activities. Analyzing the data provided for LivaNova PLC over the years, we observe the following trend:
- In December 2020, the cash conversion cycle was 90.30 days, indicating that on average it took the company 90.30 days to convert its investments in inventory and receivables into cash from sales.
- The cash conversion cycle improved slightly to 89.92 days by December 2021, suggesting a slightly more efficient management of cash flows.
- This trend continued into December 2022 with a further decrease to 89.89 days, showing a continued focus on improving cash conversion efficiency.
- However, in December 2023, the cash conversion cycle increased to 98.02 days, indicating a potential slowdown in the conversion of inventory and receivables into cash compared to the previous years.
- The company managed to bring down the cash conversion cycle to 87.89 days by December 2024, reflecting a positive move towards more efficient cash conversion.
Overall, LivaNova PLC's cash conversion cycle has shown some fluctuations over the years, with periods of improvement and slight deterioration. The company should continue to focus on optimizing its working capital management to ensure a more consistent and efficient cash conversion cycle in the future.
Peer comparison
Dec 31, 2024