Merit Medical Systems Inc (MMSI)

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	100.48	94.71	82.15	75.07	83.98
Days of sales outstanding (DSO)	days	55.61	56.73	58.08	59.20	61.43
Number of days of payables	days	21.81	24.39	20.59	18.89	20.33
Cash conversion cycle	days	134.28	127.04	119.64	115.37	125.09

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 100.48 + 55.61 – 21.81
= 134.28

The cash conversion cycle of Merit Medical Systems, Inc. has shown some fluctuations over the past five years. In 2023, the cash conversion cycle increased to 183.88 days compared to 170.67 days in 2022, indicating a longer period to convert resources into cash. This may suggest potential challenges related to managing liquidity and operating efficiency.

On the positive side, the cash conversion cycle in 2021 was lower at 161.68 days, showing an improvement in effectively managing working capital. Additionally, in 2020 and 2019, the company experienced slightly longer cash conversion cycles at 155.94 days and 172.84 days respectively.

Overall, fluctuations in the cash conversion cycle could be due to changes in the company's operating efficiency, inventory management, accounts receivables, and accounts payables processes. Merit Medical Systems, Inc. may need to focus on optimizing these elements to shorten the cash conversion cycle and improve cash flow management in the future.