Moderna Inc (MRNA)

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	9.74	50.73	155.93	86.29	—
Days of sales outstanding (DSO)	days	54.95	30.73	64.12	636.49	74.24
Number of days of payables	days	25.08	26.03	32.68	33.05	23.54
Cash conversion cycle	days	39.61	55.43	187.38	689.73	50.70

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 9.74 + 54.95 – 25.08
= 39.61

The cash conversion cycle of Moderna Inc has shown significant fluctuations over the past five years. In particular, there was a remarkable improvement in efficiency between December 2020 and December 2021, as the cash conversion cycle decreased from an exceptionally high 1,936.85 days to 223.99 days. This substantial reduction indicates that the company was able to more effectively manage its working capital during that period.

However, the cash conversion cycle increased again in December 2022 to 80.97 days, suggesting a slight deterioration in efficiency compared to the prior year. This trend continued in December 2023, with a further decrease to 33.91 days, indicating an even more efficient management of cash flows and working capital by Moderna Inc.

Overall, a decreasing trend in the cash conversion cycle is favorable as it implies that the company is able to convert its investment in inventory and receivables into cash more quickly, thereby enhancing its liquidity and operational efficiency. However, it is important for Moderna Inc to consistently monitor and manage its cash conversion cycle to ensure optimal working capital management and sustainable growth.