National HealthCare Corporation (NHC)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 3.75 | 3.45 | 3.03 | 3.12 | 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 |
| Days of sales outstanding (DSO) | days | 37.92 | 38.11 | 33.85 | 39.38 | 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 |
| Number of days of payables | days | 16.96 | 18.26 | 18.29 | 18.75 | 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 |
| Cash conversion cycle | days | 24.72 | 23.30 | 18.59 | 23.75 | 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 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 3.75 + 37.92 – 16.96
= 24.72
The cash conversion cycle of National HealthCare Corporation has exhibited fluctuations over the periods analyzed. The company's cash conversion cycle, which represents the time it takes for a company to convert its investments in inventory into cash flows from sales, ranged between 12.53 days on September 30, 2021, and 24.72 days on December 31, 2024.
The trend of the cash conversion cycle indicates that the company has been able to manage its working capital efficiently during some periods but faced challenges in others. A lower cash conversion cycle implies that the company is able to generate cash quickly and efficiently, whereas a higher cycle suggests a longer time to convert investments into cash.
Therefore, National HealthCare Corporation should focus on optimizing its inventory turnover, accounts receivable collection, and accounts payable management to further enhance its cash conversion cycle efficiency and overall liquidity position. Monitoring and managing the cash conversion cycle effectively can help the company improve its cash flow management and financial performance in the long run.
Peer comparison
Dec 31, 2024