Lantheus Holdings Inc (LNTH)

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	22.48	20.81	25.88	38.06	36.85
Days of sales outstanding (DSO)	days	81.30	84.02	78.00	59.79	48.06
Number of days of payables	days	14.46	12.06	15.31	17.34	23.50
Cash conversion cycle	days	89.32	92.77	88.56	80.51	61.42

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 22.48 + 81.30 – 14.46
= 89.32

The cash conversion cycle (CCC) of Lantheus Holdings Inc has fluctuated over the past five years. In 2023, the CCC decreased to 94.25 days from 98.70 days in 2022, indicating an improvement in the company's efficiency in converting its investments in inventory and accounts receivable into cash. However, the CCC in 2023 is still higher compared to 2020 when it was 93.47 days.

The increase in CCC from 2019 to 2020 can be attributed to a longer period between the company's cash outflows for inventory and cash inflows from sales, which may indicate reduced efficiency in managing working capital during that period. Subsequently, the decrease in CCC in 2021 and 2022 suggests that the company took steps to address these inefficiencies and improve its working capital management.

Overall, Lantheus Holdings Inc's CCC has shown some variability over the years, but the recent decrease in 2023 is a positive sign of the company's ability to manage its working capital effectively. Monitoring the CCC can help stakeholders assess the company's operational efficiency and liquidity management over time.