Privia Health Group Inc (PRVA)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — |
| Days of sales outstanding (DSO) | days | 63.70 | 50.99 | 44.40 |
| Number of days of payables | days | 2.00 | 16.09 | 3.88 |
| Cash conversion cycle | days | 61.70 | 34.90 | 40.52 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 63.70 – 2.00
= 61.70
The cash conversion cycle of Privia Health Group Inc has shown fluctuations over the past three years. In 2021, the company's cash conversion cycle was 38.14 days, which decreased to 36.63 days by the end of 2022 before increasing to 49.47 days by the end of 2023.
A longer cash conversion cycle indicates that the company takes more time to convert its investments in inventory back into cash. It could suggest inefficiencies in managing working capital, including inventory levels, accounts receivable, and accounts payable.
The increase in the cash conversion cycle from 2022 to 2023 may raise concerns about the company's liquidity and operational efficiency. It may indicate that Privia Health Group Inc is taking longer to collect receivables or manage its inventory effectively, impacting its ability to generate cash from its operations in a timely manner.
Further analysis of the components of the cash conversion cycle, such as days sales outstanding (DSO), days inventory outstanding (DIO), and days payables outstanding (DPO), would provide more insights into the specific areas that are contributing to the changes in the overall cash conversion cycle. This information would help identify potential areas for improvement in working capital management to optimize cash flow and operational performance.
Peer comparison
Dec 31, 2023