Roivant Sciences Ltd (ROIV)

Cash conversion cycle

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022
Days of inventory on hand (DOH)	days	18.72	1.68	—
Days of sales outstanding (DSO)	days	217.11	332.86	29.34
Number of days of payables	days	28.26	22.98	16.29
Cash conversion cycle	days	207.57	311.56	13.05

March 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 18.72 + 217.11 – 28.26
= 207.57

The cash conversion cycle for Roivant Sciences Ltd has shown a fluctuating trend over the past three years. In the most recent fiscal year ending March 31, 2024, the company's cash conversion cycle was 207.57 days, indicating an improvement compared to the previous year's 311.56 days. This suggests that Roivant Sciences Ltd was able to manage its operating cycle more efficiently, reducing the time it takes to convert its investments in inventory and accounts receivable into cash.

However, the significant increase in the cash conversion cycle seen in the year ending March 31, 2023, from 13.05 days to 311.56 days could indicate potential challenges in managing working capital effectively during that period. It is important for the company to analyze and address the factors contributing to such fluctuations to ensure stable cash flow and efficient operations.

Overall, monitoring and managing the cash conversion cycle is crucial for Roivant Sciences Ltd to optimize its liquidity, working capital management, and overall financial health. By continuously improving this metric, the company can enhance its operational efficiency and potentially reduce the risk of liquidity constraints.