Inari Medical Inc (NARI)

Cash conversion cycle

		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
Days of inventory on hand (DOH)	days	37.16	37.18	37.54	36.69	35.25	35.29	34.39	35.17	35.72	37.97	43.89	39.81
Days of sales outstanding (DSO)	days	51.88	55.08	53.45	50.00	55.87	56.99	53.42	53.59	55.85	55.10	54.83	66.80
Number of days of payables	days	9.16	9.33	6.97	7.39	8.29	7.18	6.12	8.95	11.10	9.90	25.01	16.08
Cash conversion cycle	days	79.87	82.94	84.02	79.30	82.84	85.11	81.69	79.81	80.47	83.17	73.71	90.54

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 37.16 + 51.88 – 9.16
= 79.87

The cash conversion cycle of Inari Medical Inc has shown fluctuations over the past eight quarters. Generally, the company takes around 250 to 280 days to convert its investments in inventory and other resources into cash flows from sales. The trend indicates that the company may be facing challenges in efficiently managing its working capital, given the prolonged time it takes to convert these resources into cash. It is essential for Inari Medical Inc to focus on optimizing its inventory management, accounts receivable collection, and accounts payable payment processes to shorten the cash conversion cycle and improve liquidity and overall financial health.