LivaNova PLC (LIVN)

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	57.94	49.97	46.67	41.82	82.47
Days of sales outstanding (DSO)	days	71.76	68.62	73.24	75.20	88.01
Number of days of payables	days	31.67	28.70	29.98	26.72	43.15
Cash conversion cycle	days	98.02	89.89	89.92	90.30	127.32

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 57.94 + 71.76 – 31.67
= 98.02

The cash conversion cycle of LivaNova PLC has displayed fluctuations over the past five years. This cycle represents the time it takes for the company to convert its investments in inventory into cash from sales, accounting for accounts receivable and payable periods.

In 2023, the cash conversion cycle increased to 132.06 days from 129.31 days in 2022. This suggests that LivaNova took slightly longer to convert its investments in inventory into cash compared to the previous year. Despite the slight increase, the cycle remained relatively stable compared to the more significant fluctuations seen in previous years.

In 2021, there was a notable improvement in the cash conversion cycle, decreasing to 107.28 days from 134.83 days in 2020. This improvement indicates that LivaNova was able to more efficiently manage its inventory, accounts receivable, and accounts payable during that period.

However, in 2019, the cash conversion cycle was notably higher at 175.05 days, indicating that the company took a longer time to convert its investments in inventory into cash from sales. This suggests potential inefficiencies in inventory management or delays in collecting receivables or paying payables.

Overall, the fluctuations in the cash conversion cycle of LivaNova PLC over the past five years highlight the importance of effectively managing working capital components to improve operational efficiency and cash flow generation.