LivaNova PLC (LIVN)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Days of inventory on hand (DOH)	days	57.87	61.76	59.31	60.12	58.74	67.56	58.07	54.44	50.67	49.14	56.68	52.41	47.40	56.34	57.63	60.18	56.27	93.00	88.55	74.79
Days of sales outstanding (DSO)	days	58.40	60.90	64.61	69.72	71.76	65.52	66.08	65.81	68.82	63.90	69.81	71.22	72.54	71.27	68.21	73.15	74.14	75.67	70.48	77.44
Number of days of payables	days	27.34	29.65	31.17	29.81	32.11	26.26	29.03	28.94	29.10	28.03	35.29	33.73	30.45	27.44	27.79	30.18	35.96	37.39	34.51	40.07
Cash conversion cycle	days	88.93	93.01	92.74	100.03	98.39	106.82	95.12	91.31	90.39	85.01	91.21	89.90	89.49	100.18	98.05	103.14	94.45	131.28	124.52	112.16

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 57.87 + 58.40 – 27.34
= 88.93

The cash conversion cycle of LivaNova PLC has shown fluctuating trends over the past few years. From March 31, 2020, to June 30, 2020, there was a significant increase from 112.16 days to 124.52 days, indicating a longer period required to convert company resources into cash. This trend continued into September 30, 2020, reaching 131.28 days, which may suggest inefficiencies in the company's working capital management during that period.

However, the company managed to improve its cash conversion cycle by the end of December 31, 2020, where it decreased to 94.45 days. This improvement was sustained through the first half of 2021, with further decreases in the cycle to 89.49 days by the end of December 31, 2021. This suggests more efficient management of inventory, accounts receivable, and accounts payable during this period.

During the following quarters, the cash conversion cycle remained relatively stable, hovering between 85.01 days and 100.03 days up to March 31, 2024. This stability indicates that LivaNova PLC was able to maintain its working capital efficiency over these periods despite external market factors.

Overall, the company's cash conversion cycle reflects its ability to effectively manage its operational and financial activities to ensure a healthy cash flow position. Keeping the cycle at optimal levels is essential for sustaining liquidity, managing operational costs, and generating value for shareholders.