Insulet Corporation (PODD)

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	350.50	377.47	273.96	285.04	273.55	277.16	270.93	265.10	253.32	270.65	310.86	330.56	319.20	280.35	217.13	184.89	174.85	145.93	126.49	126.49
Days of sales outstanding (DSO)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Cash conversion cycle	days	350.50	377.47	273.96	285.04	273.55	277.16	270.93	265.10	253.32	270.65	310.86	330.56	319.20	280.35	217.13	184.89	174.85	145.93	126.49	126.49

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 350.50 + — – —
= 350.50

Insulet Corporation's cash conversion cycle has experienced fluctuations over the periods outlined. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A longer cash conversion cycle can indicate inefficiencies in managing working capital and may strain liquidity.

Initially, the cash conversion cycle ranged around 126 to 145 days, suggesting a relatively efficient conversion of resources into cash. However, from December 31, 2020, to June 30, 2021, the cycle increased significantly to over 200 days, peaking at 330.56 days on March 31, 2022. This sharp rise indicates potential challenges in managing working capital effectively during this period.

Subsequently, there was a gradual decline in the cash conversion cycle, reaching 253.32 days by December 31, 2022. However, the cycle increased again to 377.47 days by September 30, 2024. This substantial increase could be a concern for Insulet Corporation, as a prolonged cash conversion cycle may lead to cash flow issues and decreased financial flexibility.

Overall, Insulet Corporation should closely monitor and actively manage its cash conversion cycle to sustain healthy working capital levels and ensure efficient operations. The company may need to focus on optimizing inventory management, accounts receivable collection, and accounts payable payment processes to shorten the cycle and improve cash flow dynamics.