National HealthCare Corporation (NHC)
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 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 3.48 | 3.59 | 3.44 | 3.42 | 3.48 | 3.52 | 3.62 | 4.33 | 4.48 | 4.68 | 4.28 | 4.34 | 4.69 | 3.86 | 3.88 | 4.35 | 4.14 | 4.32 | 4.07 | 3.85 |
| Days of sales outstanding (DSO) | days | 34.87 | 33.89 | 33.98 | 34.97 | 33.71 | 32.71 | 33.00 | 33.69 | 32.81 | 34.71 | 35.16 | 36.78 | 32.16 | 30.65 | 31.26 | 37.14 | 35.62 | 35.28 | 36.43 | 37.78 |
| Number of days of payables | days | 17.67 | 15.59 | 14.86 | 14.59 | 16.49 | 16.85 | 21.72 | 21.75 | 20.94 | 26.86 | 21.13 | 16.93 | 20.07 | 19.07 | 19.55 | 18.63 | 18.94 | 19.24 | 18.09 | 19.74 |
| Cash conversion cycle | days | 20.67 | 21.88 | 22.57 | 23.80 | 20.71 | 19.38 | 14.91 | 16.27 | 16.36 | 12.53 | 18.31 | 24.19 | 16.78 | 15.44 | 15.59 | 22.86 | 20.82 | 20.36 | 22.41 | 21.90 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 3.48 + 34.87 – 17.67
= 20.67
The cash conversion cycle reflects how efficiently National Healthcare Corp. manages its cash flows from operating activities. Looking at the data provided, the trend indicates that the company's cash conversion cycle has been relatively stable over the past eight quarters, ranging between 33.50 days to 35.33 days.
A lower cash conversion cycle is generally preferable as it indicates that the company is able to convert its investments in inventory and accounts receivable into cash more quickly. In this case, National Healthcare Corp. has maintained a moderately efficient cash conversion cycle, hovering around the mid-30s range.
Overall, National Healthcare Corp. seems to be managing its working capital effectively, with a consistent cash conversion cycle. However, there may still be room for improvement to further optimize cash flow efficiency in the future.
Peer comparison
Dec 31, 2023