Universal Health Services Inc (UHS)
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 | 8.47 | 8.42 | 8.56 | 8.69 | 8.85 | 8.89 | 8.72 | 8.93 | 9.15 | 9.32 | 9.18 | 9.42 | 9.38 | 8.75 | 8.36 | 8.01 | 7.93 | 7.82 | 7.79 | 7.69 |
| Days of sales outstanding (DSO) | days | 58.04 | 58.98 | 56.37 | 55.28 | 55.49 | 52.88 | 51.66 | 49.86 | 50.74 | 51.98 | 53.74 | 52.19 | 55.01 | 49.85 | 46.99 | 48.10 | 50.62 | 50.71 | 53.42 | 54.30 |
| Number of days of payables | days | 23.97 | — | — | — | 25.80 | — | — | — | 29.15 | — | — | — | 28.10 | — | — | — | 22.18 | — | — | — |
| Cash conversion cycle | days | 42.54 | 67.40 | 64.93 | 63.97 | 38.55 | 61.77 | 60.38 | 58.79 | 30.74 | 61.29 | 62.93 | 61.61 | 36.29 | 58.60 | 55.35 | 56.10 | 36.38 | 58.53 | 61.21 | 61.98 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 8.47 + 58.04 – 23.97
= 42.54
The cash conversion cycle of Universal Health Services, Inc. has shown some fluctuation over the past eight quarters. The cycle measures the time it takes for the company to convert its investments in inventory into cash flows from sales.
From Q1 2022 to Q4 2023, the cash conversion cycle ranged from 49.57 days to 58.15 days. A longer cash conversion cycle indicates that the company is taking more time to turn its resources into cash, which can potentially strain liquidity.
The company experienced a peak in the cash conversion cycle in Q3 2023 at 58.15 days, indicating a slowdown in converting investments into cash. This was followed by a slight improvement in Q4 2023 to 57.20 days, but the cycle remains relatively high compared to previous quarters.
Overall, Universal Health Services, Inc. should aim to monitor and potentially optimize its cash conversion cycle to ensure efficient liquidity management and maximize cash flow generation.
Peer comparison
Dec 31, 2023