ResMed Inc (RMD)

Cash conversion cycle

		Jun 30, 2024	Mar 31, 2024	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
Days of inventory on hand (DOH)	days	98.42	99.99	112.72	120.90	131.57	140.85	147.25	133.92	116.39	104.86	96.46	84.81	80.13	96.67	104.74	121.43	122.79	107.26	116.63	113.34
Days of sales outstanding (DSO)	days	65.28	62.80	59.95	58.57	61.68	61.63	64.25	61.39	57.66	51.47	54.64	61.44	68.66	60.93	59.42	55.71	58.59	70.04	69.22	66.77
Number of days of payables	days	28.46	21.39	24.45	22.34	19.88	22.55	29.18	28.10	24.92	23.62	26.61	29.08	24.20	23.41	26.95	29.87	39.99	34.73	35.29	34.84
Cash conversion cycle	days	135.25	141.40	148.22	157.14	173.38	179.93	182.31	167.21	149.14	132.71	124.49	117.17	124.59	134.19	137.21	147.27	141.39	142.58	150.55	145.27

June 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 98.42 + 65.28 – 28.46
= 135.25

The cash conversion cycle of ResMed Inc has exhibited fluctuations over the past few quarters. The company's cash conversion cycle, which represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, has ranged from a low of 117.17 days to a high of 182.31 days over the last few years.

On average, the cash conversion cycle for ResMed Inc has been around 150 days, indicating that the company takes approximately five months to convert its investment in inventory into cash sales. A higher cash conversion cycle indicates that the company takes longer to sell its inventory and collect cash from customers, which could potentially signal inefficiencies in the company's operations or challenges in managing working capital.

It is important for ResMed Inc to monitor and manage its cash conversion cycle effectively to optimize its working capital management and ensure efficient use of resources. By reducing the cash conversion cycle, the company can improve its cash flow, liquidity, and overall financial performance.