Nu Skin Enterprises Inc (NUS)
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 | 53.21 | 59.35 | 58.87 | 48.78 | 46.14 |
| Days of sales outstanding (DSO) | days | 13.70 | 7.84 | 5.65 | 9.00 | 7.65 |
| Number of days of payables | days | 8.27 | 9.25 | 7.36 | 10.27 | 6.52 |
| Cash conversion cycle | days | 58.64 | 57.94 | 57.15 | 47.51 | 47.27 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 53.21 + 13.70 – 8.27
= 58.64
The cash conversion cycle of Nu Skin Enterprises, Inc. has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle decreased to 154.58 days from 176.82 days in 2022, indicating an improvement in the efficiency of converting its investments in inventory and other resources into cash. This suggests that Nu Skin may have managed its inventory levels more effectively or negotiated better payment terms with suppliers.
Comparing 2023 to 2021, the cash conversion cycle has decreased significantly from 194.76 days to 154.58 days, showcasing a positive trend in the company's cash management practices. This improvement could indicate better working capital management and a more efficient sales and collection process.
However, in 2023, the cash conversion cycle increased from 146.63 days in 2020 to 154.58 days, suggesting a slowdown in cash conversion efficiency compared to the previous year. This increase could be due to factors such as increased inventory levels, longer payment terms with suppliers, or delays in collecting receivables.
Looking back at 2019, the cash conversion cycle was slightly higher at 156.32 days compared to 2023, indicating that Nu Skin may have made progress in streamlining its cash conversion processes over the years.
Overall, while the company has experienced fluctuations in its cash conversion cycle, the decrease in 2023 compared to previous years suggests improvements in managing working capital and converting investments into cash. Continued monitoring and optimization of cash conversion processes will be crucial for Nu Skin Enterprises, Inc. to effectively manage its liquidity and operational efficiency.
Peer comparison
Dec 31, 2023