Tenet Healthcare Corporation (THC)
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 | 9.49 | 7.63 | 9.56 | 13.06 | 20.50 | 42.84 | 42.63 | 43.96 | 45.16 | 44.24 | 43.32 | 43.13 | 42.12 | 41.41 | 40.62 | 44.43 | 45.04 | 43.02 | 41.88 | 38.41 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 9.49 | 7.63 | 9.56 | 13.06 | 20.50 | 42.84 | 42.63 | 43.96 | 45.16 | 44.24 | 43.32 | 43.13 | 42.12 | 41.41 | 40.62 | 44.43 | 45.04 | 43.02 | 41.88 | 38.41 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 9.49 + — – —
= 9.49
The cash conversion cycle of Tenet Healthcare Corporation has shown fluctuations over the years based on the provided data. The cash conversion cycle is a measure of how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
From March 31, 2020, to June 30, 2024, the cash conversion cycle ranged from a high of 45.16 days to a low of 7.63 days. The cycle generally decreased from the end of 2023 to the middle of 2024, indicating an improvement in the company's ability to convert its resources into cash more efficiently.
A shorter cash conversion cycle typically suggests that a company is managing its operations well, by efficiently selling its inventory, collecting receivables, and managing payables. On the other hand, a longer cycle can indicate inefficiencies in managing working capital.
However, it's important to note that the specific reasons behind these changes in the cash conversion cycle would require further analysis, including examining the company's inventory turnover, accounts receivable collection period, and accounts payable turnover. Overall, analyzing the trend of the cash conversion cycle can provide insights into the effectiveness of Tenet Healthcare Corporation's working capital management.
Peer comparison
Dec 31, 2024