Arcus Biosciences Inc (RCUS)

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	—	—	—	—	—
Days of sales outstanding (DSO)	days	12.48	140.13	711.89	7.50	6.11
Number of days of payables	days	49.64	66.36	47.94	125.65	59.60
Cash conversion cycle	days	-37.16	73.77	663.94	-118.16	-53.50

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 12.48 – 49.64
= -37.16

The cash conversion cycle of Arcus Biosciences Inc has shown significant fluctuations over the past five years. In 2019 and 2020, the company had a very efficient cash conversion cycle of 3.21 days and 8.00 days respectively, indicating that it was able to quickly convert its investments in inventory and accounts receivable into cash.

However, starting in 2021, the cash conversion cycle increased dramatically to 711.94 days, reflecting a significant slowdown in the company's ability to convert its resources into cash. This sudden increase may indicate issues with managing inventory levels, collecting receivables, or overall liquidity constraints.

In 2022 and 2023, although there was some improvement compared to 2021, the cash conversion cycle remained high at 127.10 days and 118.55 days respectively. This suggests that the company still faces challenges in optimizing its working capital management and cash flow efficiency.

Overall, the fluctuation in Arcus Biosciences Inc's cash conversion cycle over the years highlights the importance of continuously monitoring and improving operational processes to enhance liquidity and financial stability.