R1 RCM Inc (RCM)
Cash conversion cycle
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | ||
|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 12.40 | — | — | — | |||
| Days of sales outstanding (DSO) | days | 1.15 | — | — | — | |||
| Number of days of payables | days | 4.84 | 4.26 | 5.68 | 6.18 | |||
| Cash conversion cycle | days | 8.72 | -4.26 | -5.68 | -6.18 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 12.40 + 1.15 – 4.84
= 8.72
The cash conversion cycle of R1 RCM Inc. has exhibited fluctuations over the past eight quarters. The company's cash conversion cycle measures the time it takes to convert its investments in inventory and accounts receivable into cash flow from sales.
In Q1 2022, the cash conversion cycle was notably lower at 26.11 days, indicating an efficient operation as the company was able to quickly convert its investments into cash. However, there was a significant increase in the cycle in Q4 2022, reaching 47.76 days, suggesting a slowdown in the conversion of investments into cash flow.
In the subsequent quarters of 2023, the cash conversion cycle remained relatively stable, hovering around the mid-30s to low 40s range. This stability indicates that the company was able to manage its inventory levels and receivables effectively to optimize its cash flow.
Overall, R1 RCM Inc. should continue to monitor and manage its cash conversion cycle closely to ensure efficient operations and maximize its cash flow from sales. fluctuations in the cycle could indicate inefficiencies in managing inventory and receivables, which could impact the company's overall financial health.
Peer comparison
Dec 31, 2023