RadNet Inc (RDNT)
Cash conversion cycle
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | 0.75 | 0.76 | 0.80 | 0.83 |
| Days of sales outstanding (DSO) | days | 36.96 | 38.75 | 41.67 | 48.56 | 47.30 | 46.61 | 45.78 | 45.03 | 38.98 | 44.91 | 47.82 | 50.90 | 46.12 | 47.25 | 43.57 | 45.61 | 49.34 | 50.00 | 55.08 | 56.58 |
| Number of days of payables | days | 399.64 | — | — | — | 357.96 | — | — | — | 346.01 | — | — | — | 283.55 | — | — | — | 23.48 | — | — | — |
| Cash conversion cycle | days | -362.68 | 38.75 | 41.67 | 48.56 | -310.66 | 46.61 | 45.78 | 45.03 | -307.03 | 44.91 | 47.82 | 50.90 | -237.43 | 47.25 | 43.57 | 45.61 | 26.60 | 50.76 | 55.88 | 57.41 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 36.96 – 399.64
= -362.68
The cash conversion cycle measures the efficiency of a company in managing its cash flows related to operating activities. It is calculated by adding the days inventory outstanding (DIO) to the days sales outstanding (DSO) and then subtracting the days payable outstanding (DPO).
In the case of Radnet Inc, the cash conversion cycle fluctuated significantly over the past eight quarters. In Q1 2023, the company's cash conversion cycle was 48.56 days, indicating that it took approximately 48.56 days for the company to convert its investments in inventory into cash receipts from customers and pay its suppliers. This was a marked increase from the previous quarter where the cycle was 46.99 days, suggesting a deterioration in the company's efficiency in managing its cash flows.
Comparing Q1 2023 to Q4 2022, there was a notable increase in the cash conversion cycle from 17.66 days to 48.56 days, indicating a prolonged period in converting resources into cash. However, in Q4 2022, the cycle was substantially shorter, suggesting improved efficiency compared to the latest quarter.
Overall, Radnet Inc experienced fluctuations in its cash conversion cycle over the analyzed periods, indicating variations in its management of inventories, accounts receivable, and accounts payable. Stakeholders should monitor these trends to assess the company's operational efficiency and liquidity management.
Peer comparison
Dec 31, 2023