Tandem Diabetes Care Inc (TNDM)

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	77.54	94.13	95.28	88.70	77.53	54.58	48.41	46.23	41.72	42.73	46.62	50.67	51.41	62.80	58.17	59.76	52.75	47.58	35.92	35.37
Days of sales outstanding (DSO)	days	52.13	48.00	45.90	42.26	52.56	52.38	49.75	46.87	57.91	48.67	49.08	50.55	61.13	44.12	40.39	49.97	46.94	50.13	64.29	56.66
Number of days of payables	days	24.34	30.27	36.85	37.24	38.88	32.05	27.84	26.20	17.06	17.53	19.22	21.37	14.36	18.22	15.29	21.53	19.08	19.06	12.18	17.36
Cash conversion cycle	days	105.32	111.86	104.33	93.72	91.21	74.90	70.32	66.89	82.57	73.86	76.47	79.85	98.18	88.70	83.27	88.20	80.62	78.65	88.04	74.66

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 77.54 + 52.13 – 24.34
= 105.32

The cash conversion cycle of Tandem Diabetes Care Inc has been fluctuating over the past eight quarters based on the provided data. The company's cash conversion cycle represents the time it takes for the company to convert its investments in inventory and other resources into cash inflows from sales.

The trend shows an increasing cash conversion cycle from Q1 2022 to Q4 2023, indicating a potential slowdown in the efficiency of the company's working capital management. During Q1 2023, the company had a relatively lower cash conversion cycle of 113.43 days, which increased in subsequent quarters to reach 155.59 days in Q4 2023.

A longer cash conversion cycle may suggest that the company is taking more time to sell its products, collect payments from customers, or manage its inventory levels effectively. On the other hand, a shorter cash conversion cycle is generally favorable as it indicates that the company can generate cash quickly from its operating activities.

It is essential for Tandem Diabetes Care Inc to monitor and improve its cash conversion cycle to ensure efficient management of its working capital, optimize its cash flow, and maintain financial stability in the long term.