USANA Health Sciences Inc (USNA)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 59.75 | 51.50 | 53.48 | 72.03 | 69.83 |
| Days of sales outstanding (DSO) | days | 3.50 | 2.84 | 2.63 | 2.20 | 2.38 |
| Number of days of payables | days | 10.27 | 8.44 | 8.81 | 9.90 | 14.08 |
| Cash conversion cycle | days | 52.98 | 45.91 | 47.30 | 64.33 | 58.13 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 59.75 + 3.50 – 10.27
= 52.98
The cash conversion cycle of USANA Health Sciences Inc has fluctuated over the years, indicating changes in the efficiency of the company's working capital management.
In 2020, the cash conversion cycle was at 58.13 days, showing the number of days it took for the company to convert its investment in raw materials into cash receipts from sales. This number increased to 64.33 days in 2021, reflecting a potential slowdown in the conversion process.
However, the company improved its cash conversion cycle significantly in 2022, reducing it to 47.30 days, which suggests a more efficient utilization of working capital. This trend continued in 2023, with a further decrease to 45.91 days, indicating enhanced operational efficiency and faster conversion of inventory and receivables into cash.
Despite the improvements, the cash conversion cycle slightly increased in 2024 to 52.98 days, which may warrant closer monitoring to identify any potential issues in working capital management that could impact the company's liquidity and profitability in the future.
Overall, analyzing the cash conversion cycle provides insight into USANA Health Sciences Inc's ability to efficiently manage its working capital and convert its investments into cash, which is crucial for sustaining operations and supporting future growth.