Stryker Corporation (SYK)

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	237.59	244.35	231.55	223.00	212.22	216.02	214.41	206.29	197.00	207.90	216.40	231.28	240.90	243.87	243.57	235.23	209.66	233.96	236.77	233.38
Days of sales outstanding (DSO)	days	67.04	60.13	61.18	61.92	70.53	63.10	65.12	62.63	64.47	61.68	60.98	64.88	68.70	62.27	57.15	64.58	70.94	61.16	61.88	60.08
Number of days of payables	days	74.42	64.85	66.85	70.30	75.06	67.48	66.34	63.44	67.11	56.55	54.49	51.08	55.85	45.62	44.94	51.54	47.49	47.16	45.61	47.15
Cash conversion cycle	days	230.21	239.63	225.88	214.62	207.69	211.64	213.19	205.49	194.36	213.04	222.88	245.09	253.75	260.53	255.78	248.27	233.11	247.96	253.04	246.31

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 some fluctuations over the past eight quarters. In Q4 2023, the cash conversion cycle was at 230.21 days, indicating the company takes around 230 days to convert its investments in inventory and other resources into cash flows from sales. This represented a decrease compared to Q3 2023, where the cycle was 239.63 days. However, the cycle in Q4 2023 was higher than in Q4 2022, suggesting potential inefficiencies in managing working capital compared to the prior year.

The trend in the cash conversion cycle throughout 2023 has displayed some variations, with Q2 2023 showing a decrease to 225.88 days and Q1 2023 at 214.62 days. This indicates an improvement in the efficiency of the company in managing its working capital during the first half of the year.

Compared to the same quarters in 2022, the cash conversion cycle in 2023 generally appears to be on a slightly upward trend, with the cycle being consistently higher in 2023. This suggests that Stryker may be taking longer to convert its investments into cash compared to the previous year, which could potentially impact its liquidity and overall financial performance.

Overall, the fluctuations in the cash conversion cycle of Stryker Corp. indicate varying levels of efficiency in managing its inventory, receivables, and payables. Further analysis and monitoring of these trends may be necessary to ensure optimal working capital management and overall financial health of the company.