Stryker Corporation (SYK)
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 | 237.59 | 212.22 | 197.00 | 240.90 | 209.66 |
| Days of sales outstanding (DSO) | days | 67.04 | 70.53 | 64.47 | 68.70 | 70.94 |
| Number of days of payables | days | 74.42 | 75.06 | 67.11 | 55.85 | 47.49 |
| Cash conversion cycle | days | 230.21 | 207.69 | 194.36 | 253.75 | 233.11 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 237.59 + 67.04 – 74.42
= 230.21
The cash conversion cycle of Stryker Corp. has shown fluctuations over the past five years. In the most recent year, as of Dec 31, 2023, the cash conversion cycle increased to 230.21 days from 207.69 days in the previous year, indicating that the company took longer to convert its investments in inventory into cash receipts from its sales. This could imply potential challenges in managing the company's working capital efficiently.
Comparing the current cash conversion cycle to the one from five years ago, there has been a slight improvement as it decreased from 254.36 days in Dec 31, 2019. This suggests that Stryker Corp. might have made some improvements in managing its inventory, accounts receivable, and accounts payable in the intervening years.
Overall, the trend in the cash conversion cycle over the five-year period highlights the importance of monitoring working capital efficiencies and the need for Stryker Corp. to continuously evaluate and optimize its cash conversion processes to enhance liquidity and operational performance.
Peer comparison
Dec 31, 2023