Stryker Corporation (SYK)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Days of inventory on hand (DOH)	days	213.67	241.30	236.67	241.76	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
Days of sales outstanding (DSO)	days	64.41	62.06	61.81	60.47	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
Number of days of payables	days	75.15	60.96	61.19	59.94	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
Cash conversion cycle	days	202.93	242.39	237.29	242.30	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

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 213.67 + 64.41 – 75.15
= 202.93

The cash conversion cycle of Stryker Corporation has shown fluctuations over the analyzed period, starting at approximately 248 days in March 2020 and ending at around 203 days by December 2024. This metric represents the time it takes for the company to convert its investments in raw materials into cash received from sales. A lower cash conversion cycle indicates the company is more efficient in managing its working capital.

During the period under review, the trend shows some improvement in the efficiency of Stryker's cash conversion cycle, declining gradually before experiencing a slight increase in September 2024. This indicates that the company has been able to streamline its operations to a certain extent, potentially by improving inventory management, accounts receivable collection, or extending payment terms to suppliers.

It's worth noting that a decreasing cash conversion cycle can also signal potential risks, such as inventory shortages or liquidity problems. Therefore, continuous monitoring of this metric is important to ensure the company maintains a balance between efficiency and liquidity.