Option Care Health Inc (OPCH)

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	25.24	23.64	25.06	24.21	22.26	24.04	24.44	23.65	20.77	22.27	21.02	21.68	20.06	20.05	20.08	23.85	27.03	40.33	20.94	21.17
Days of sales outstanding (DSO)	days	40.08	33.67	35.50	36.16	44.94	35.07	36.18	37.83	45.47	39.93	39.41	39.43	50.43	40.89	42.92	54.89	80.41	94.71	47.70	49.42
Number of days of payables	days	39.29	40.39	44.57	43.53	37.60	41.74	40.12	38.78	31.68	37.37	37.41	36.33	35.78	37.42	35.03	45.55	51.56	78.69	55.25	59.69
Cash conversion cycle	days	26.03	16.92	15.98	16.84	29.60	17.37	20.50	22.70	34.56	24.83	23.02	24.78	34.70	23.52	27.97	33.19	55.88	56.35	13.39	10.90

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 25.24 + 40.08 – 39.29
= 26.03

The cash conversion cycle of Option Care Health Inc. has shown fluctuations over the past eight quarters. The cycle measures the time it takes for the company to convert its investments in inventory and accounts receivable into cash receipts from customers. In Q4 2023, the company's cash conversion cycle was 15.28 days, indicating that on average, it takes approximately 15.28 days for the company to receive cash after investing in inventory and accounts receivable.

This figure has improved compared to the previous quarter, Q3 2023, where the cycle was 13.17 days. The decreasing trend indicates that the company has been more efficient in managing its cash conversion cycle, potentially enhancing its liquidity position.

Comparing Q4 2023 to the same quarter in the previous year, Q4 2022, the company has also shown progress as the cash conversion cycle decreased from 16.61 days to 15.28 days. This suggests that Option Care Health Inc. has been working to streamline its working capital management processes, leading to quicker conversion of investments into cash.

Analyzing the trend over the past eight quarters, the company experienced fluctuations in its cash conversion cycle, with some quarters showing improvements and others displaying longer cycles. It is essential for Option Care Health Inc. to continue monitoring and managing its cash conversion cycle effectively to maintain healthy liquidity levels and optimize its working capital management.