Penumbra Inc (PEN)
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 | 376.79 | 390.84 | 353.33 | 360.55 | 318.30 |
| Days of sales outstanding (DSO) | days | 69.57 | 87.63 | 65.39 | 74.64 | 70.61 |
| Number of days of payables | days | 26.37 | 31.22 | 18.00 | 23.17 | 31.44 |
| Cash conversion cycle | days | 420.00 | 447.25 | 400.73 | 412.02 | 357.47 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 376.79 + 69.57 – 26.37
= 420.00
The cash conversion cycle of Penumbra Inc has fluctuated over the past five years, ranging from a low of 357.47 days in 2019 to a high of 447.25 days in 2022. In 2023, the cash conversion cycle decreased to 420.00 days. This metric represents the time it takes for the company to convert its investments in inventory and other resources into cash inflows from sales, indicating the efficiency of its working capital management.
A longer cash conversion cycle may indicate inefficiencies in the company's operations, such as slow inventory turnover or extended collection periods from customers. Conversely, a shorter cash conversion cycle suggests that the company is able to swiftly replenish its cash reserves through its operating activities.
Overall, Penumbra Inc's cash conversion cycle performance has shown variability over the years, with the recent decrease in 2023 potentially signaling improved working capital management. It is important for the company to continue monitoring and optimizing its cash conversion cycle to ensure efficient use of its resources and maintain healthy liquidity levels.
Peer comparison
Dec 31, 2023