Vericel Corp Ord (VCEL)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	77.12	106.91	97.37	85.48	66.22
Days of sales outstanding (DSO)	days	97.49	89.80	71.13	85.84	87.55
Number of days of payables	days	131.69	113.22	65.61	61.71	61.64
Cash conversion cycle	days	42.92	83.49	102.89	109.60	92.13

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 77.12 + 97.49 – 131.69
= 42.92

Vericel Corp's cash conversion cycle has shown a decreasing trend over the past five years. The company's cash conversion cycle decreased from 104.21 days in 2019 to 53.27 days in 2023. This indicates that Vericel Corp has been able to manage its working capital more efficiently over the years.

A lower cash conversion cycle suggests that the company is able to convert its investments in inventory and receivables into cash more quickly, which is a positive sign of operational efficiency. It may imply effective inventory management and prompt collection of receivables.

The improvement in the cash conversion cycle over the years could also suggest that Vericel Corp has optimized its production and sales processes, leading to a reduced need for working capital and a faster cash turnover cycle. Overall, the decreasing trend in the cash conversion cycle is a favorable indicator of the company's management of its operational and financial resources.