ResMed Inc (RMD)

Cash conversion cycle

		Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	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
Days of inventory on hand (DOH)	days	151.21	155.36	162.85	156.87	159.43	180.93	192.09	195.08	210.33	221.58	201.63	174.75	156.89	144.55	128.23	122.86	136.61	134.18	138.13	124.14
Days of sales outstanding (DSO)	days	65.99	63.71	61.59	67.22	67.11	61.02	59.66	60.93	62.38	65.20	62.49	58.75	52.45	58.37	65.54	70.14	61.99	61.25	57.20	59.75
Number of days of payables	days	39.01	38.80	44.22	45.35	34.11	39.24	35.49	29.47	33.67	43.92	42.31	37.41	35.34	39.88	43.96	37.10	33.08	34.52	33.98	40.43
Cash conversion cycle	days	178.18	180.26	180.22	178.74	192.43	202.71	216.26	226.54	239.04	242.87	221.81	196.09	173.99	163.04	149.81	155.90	165.53	160.91	161.35	143.47

March 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 151.21 + 65.99 – 39.01
= 178.18

The data indicates that ResMed Inc’s cash conversion cycle (CCC) has experienced a significant fluctuation over the analyzed period from June 2020 to March 2025. Initially, the CCC was approximately 143.47 days as of June 30, 2020, and showed a gradual upward trend, reaching a peak of around 242.87 days by December 2022. This increase suggests that the company's operations were taking longer to convert investments in inventory and receivables into cash, potentially reflecting issues such as extended inventory holding periods, slower collection processes, or changes in credit terms.

Post-December 2022, a downward trend is observable, with the CCC decreasing to approximately 178.18 days as of March 2025. This reduction indicates a period of operational improvement where the company has been able to shorten its cycle, likely through improved inventory management, more efficient receivables collection, or adjustments in credit policies.

The overall trend suggests that while the CCC increased markedly over approximately two years, pointing to a period of operational inefficiencies or strategic shifts, recent months show signs of stabilization and potential recovery toward more efficient cash conversion timing. This pattern may reflect efforts to optimize supply chain processes, streamline receivables, or improve working capital management. The sustained decrease in CCC in the latest data points to a favorable trend toward enhanced cash flow management and operational efficiency.