Masimo Corporation (MASI)

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	77.98	121.84	110.91	111.52	115.76	120.15	109.63	93.73	116.52	148.43	188.38	181.95	170.61	173.22	178.83	188.35	196.72	200.31	163.34	135.41
Days of sales outstanding (DSO)	days	3.53	73.49	66.70	67.09	68.24	65.51	61.67	—	3.38	—	—	—	59.85	—	—	—	—	—	—	—
Number of days of payables	days	42.93	60.04	46.70	44.75	53.42	58.27	53.64	46.37	64.37	80.24	102.54	74.54	64.04	51.98	57.34	54.80	58.36	87.58	94.28	57.33
Cash conversion cycle	days	38.58	135.30	130.91	133.86	130.58	127.40	117.66	47.36	55.52	68.19	85.85	107.42	166.41	121.25	121.49	133.55	138.37	112.73	69.06	78.07

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 77.98 + 3.53 – 42.93
= 38.58

Masimo Corporation's cash conversion cycle has experienced fluctuations over the provided periods. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from a low of 38.58 days to a high of 166.41 days. A lower cash conversion cycle indicates that the company is efficiently managing its working capital, while a higher cycle may suggest potential liquidity challenges.

The trend analysis shows some variability in Masimo Corporation's cash conversion cycle, with periods of shorter cycles followed by longer cycles and vice versa. It is crucial to investigate the factors influencing these fluctuations, such as changes in inventory management, accounts receivable collection, and accounts payable payment policies.

Analyzing the cash conversion cycle can provide insights into a company's operational efficiency, liquidity, and cash flow management. Masimo Corporation should aim to optimize its cash conversion cycle to enhance its working capital management and overall financial performance.