Regeneron Pharmaceuticals Inc (REGN)
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 | 331.61 | 366.96 | 310.15 | 499.83 | 268.67 |
| Days of sales outstanding (DSO) | days | 158.58 | 160.56 | 137.58 | 134.56 | 110.00 |
| Number of days of payables | days | 77.95 | 90.02 | 89.64 | 124.01 | 79.36 |
| Cash conversion cycle | days | 412.24 | 437.50 | 358.09 | 510.38 | 299.31 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 331.61 + 158.58 – 77.95
= 412.24
The cash conversion cycle of Regeneron Pharmaceuticals, Inc. has exhibited significant fluctuations over the past five years.
In 2023, the company's cash conversion cycle decreased to 930.66 days from 986.82 days in 2022. This improvement indicates that Regeneron Pharmaceuticals was able to convert its investments in raw materials and production back into cash more efficiently in 2023 than in the previous year.
The significant increase in the cash conversion cycle in 2020 to 1,246.08 days, from 1,128.87 days in 2019, suggests a notable lag in the company's ability to collect receivables and sell inventory. This prolonged cycle indicates that Regeneron Pharmaceuticals took longer to convert its investments in inventory and accounts receivable into cash flow in 2020, which may have been a result of challenges in sales, production, or collection processes.
The sharp decline in 2021 to 422.67 days shows a remarkable improvement in the company's efficiency in managing its working capital. Regeneron Pharmaceuticals was able to streamline its operations, leading to a significant reduction in the time taken to convert its resources back into cash.
Overall, Regeneron Pharmaceuticals should focus on maintaining efficient inventory management, prompt collection of receivables, and effective payment of payables to optimize its cash conversion cycle and improve its working capital management. Tracking and analyzing these trends can provide valuable insights for the company's financial performance and operational efficiency.
Peer comparison
Dec 31, 2023