United Therapeutics Corporation (UTHR)

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	55.66	98.32	115.98	123.80	222.40	65.26	77.08	100.35	86.44	106.67	113.11	111.62	114.56	186.32	169.03	235.32	289.89	284.56	253.36	201.11
Days of sales outstanding (DSO)	days	44.88	43.95	48.30	25.31	42.25	48.51	37.75	37.54	43.51	44.34	37.52	32.16	38.52	39.74	44.05	37.85	38.14	44.11	43.17	36.43
Number of days of payables	days	2.79	—	—	—	8.94	—	—	—	3.50	—	—	—	5.43	—	—	—	30.73	—	—	—
Cash conversion cycle	days	97.76	142.27	164.28	149.11	255.72	113.77	114.83	137.89	126.44	151.00	150.63	143.77	147.65	226.05	213.07	273.17	297.31	328.68	296.53	237.53

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 55.66 + 44.88 – 2.79
= 97.76

The cash conversion cycle of United Therapeutics Corp has shown fluctuations over the past eight quarters, ranging from 194.27 days to 313.70 days. The trend indicates that the company has been able to improve its efficiency in managing its cash cycles since Q4 of 2022.

In Q1 2022, the cash conversion cycle was at its highest at 313.70 days, which suggests the company took a longer time to convert its investments in inventory and other resources into cash receipts from sales. However, the company made significant improvements in managing its working capital, as seen from the decreasing trend in subsequent quarters.

By Q4 2023, the cash conversion cycle had decreased to 194.27 days, indicating that United Therapeutics Corp has become more efficient in managing its inventory, accounts receivable, and accounts payable. This could be a positive sign of improved operational efficiency and effective cash flow management within the company.

Overall, the decreasing trend in the cash conversion cycle over the past eight quarters suggests that United Therapeutics Corp has been successful in optimizing its working capital and improving its cash flow management, which could potentially lead to better financial performance and liquidity in the future.