Select Medical Holdings (SEM)
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 | 1.36 | — | 1.00 | — | — | 1.18 | 2.66 | 2.59 | — | 1.04 | 0.37 | 0.40 | 0.41 | 1.74 | 0.89 | 1.72 | — | 4.90 | 1.81 | 0.79 |
| Days of sales outstanding (DSO) | days | 53.15 | 50.98 | 52.69 | 55.14 | 52.46 | 51.06 | 51.94 | 53.16 | 50.63 | 54.59 | 57.61 | 62.97 | 60.43 | 57.69 | 52.00 | 55.46 | 52.74 | 56.41 | 56.49 | 56.34 |
| Number of days of payables | days | 10.41 | 11.02 | 11.34 | 10.63 | 11.44 | 12.72 | 14.44 | 15.11 | 15.15 | 12.91 | 12.88 | 13.51 | 12.88 | 11.84 | 13.84 | 17.87 | 35.88 | 35.65 | 20.31 | 14.37 |
| Cash conversion cycle | days | 44.10 | 39.96 | 42.36 | 44.51 | 41.03 | 39.51 | 40.16 | 40.64 | 35.48 | 42.72 | 45.11 | 49.87 | 47.96 | 47.59 | 39.05 | 39.30 | 16.86 | 25.66 | 38.00 | 42.76 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 1.36 + 53.15 – 10.41
= 44.10
The cash conversion cycle measures the time it takes for a company like Select Medical Holdings Corporation to convert its investments in inventory and other resources into cash flows from sales. A lower cash conversion cycle indicates more efficient management of working capital.
Based on the data provided:
- Select Medical's cash conversion cycle fluctuated over the quarters, ranging from a low of 38.21 days in Q2 2022 to a high of 45.56 days in Q1 2023.
- In Q4 2023 and Q3 2023, the cash conversion cycle was relatively stable around 40 days, indicating consistent efficiency in managing working capital.
- However, there was a slight increase in the cash conversion cycle in Q1 2023, which may suggest a potential slowdown in turning investments into cash during that period.
- Comparing Q4 2023 to the same quarter in the previous year (Q4 2022), there was a slight improvement in efficiency, with a decrease in the cash conversion cycle from 42.08 days to 40.40 days.
Overall, Select Medical's cash conversion cycle performance has been relatively consistent, with some fluctuations indicating periods of more efficient or less efficient working capital management. Monitoring and managing this cycle effectively can help the company optimize its liquidity and operational efficiency.
Peer comparison
Dec 31, 2023