STAAR Surgical Company (STAA)
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 | 367.60 | 289.10 | 243.27 | 293.16 | 327.32 |
| Days of sales outstanding (DSO) | days | 109.99 | 83.57 | 72.50 | 83.26 | 77.06 |
| Number of days of payables | days | 70.93 | 69.26 | 61.25 | 60.49 | 76.86 |
| Cash conversion cycle | days | 406.66 | 303.41 | 254.51 | 315.93 | 327.53 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 367.60 + 109.99 – 70.93
= 406.66
The cash conversion cycle of STAAR Surgical Company has exhibited fluctuating trends over the past five years. In 2023, the cash conversion cycle increased to 406.66 days from 303.41 days in 2022, indicating a significant deterioration in the company's ability to convert its investments in inventory and accounts receivable into cash. This could suggest potential inefficiencies in managing working capital or challenges in collecting receivables and selling inventory.
Compared to 2021 when the cash conversion cycle was 254.51 days, the current cycle is notably longer, indicating a potential slowdown in the company's cash conversion process. However, it is worth noting that the cycle is still lower than in 2020 and 2019, demonstrating some improvement in efficiency compared to those years.
Overall, the increasing trend in the cash conversion cycle over the years highlights the importance for STAAR Surgical Company to focus on managing inventory levels, optimizing accounts receivable collection, and streamlining its overall working capital management to enhance its cash conversion efficiency and strengthen its financial performance.
Peer comparison
Dec 31, 2023