Neurocrine Biosciences Inc (NBIX)

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	15.02	16.50	19.09	23.59	17.83
Days of sales outstanding (DSO)	days	85.14	90.50	61.85	59.00	61.10
Number of days of payables	days	—	—	—	—	—
Cash conversion cycle	days	100.16	107.00	80.93	82.59	78.94

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 15.02 + 85.14 – —
= 100.16

The cash conversion cycle of Neurocrine Biosciences, Inc. has shown an improving trend over the past five years. The cycle decreased from 908.13 days in 2019 to 437.10 days in 2023. This indicates that the company has been able to manage its working capital more efficiently, leading to a quicker conversion of inventory into cash.

A lower cash conversion cycle signifies that Neurocrine Biosciences, Inc. is taking less time to sell its inventory, collect payments from customers, and pay off its suppliers. This can be a positive sign of effective inventory management, strong customer payment collection processes, and optimized supplier payment terms.

By continually reducing its cash conversion cycle, Neurocrine Biosciences, Inc. may be improving its liquidity position and cash flow management, which could potentially lead to increased profitability and financial stability in the long term.