Viatris Inc (VTRS)
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 | 154.32 | 140.90 | 131.54 | 117.93 | 245.08 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 154.32 | 140.90 | 131.54 | 117.93 | 245.08 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 154.32 + — – —
= 154.32
The cash conversion cycle of Viatris Inc has shown a fluctuating trend over the past five years.
- As of December 31, 2020, the cash conversion cycle stood at 245.08 days, indicating that the company took over 8 months to convert its investments in inventory and accounts receivable into cash.
- By December 31, 2021, there was a significant improvement in the cash conversion cycle, decreasing to 117.93 days. This sharp reduction suggests that Viatris Inc was able to more efficiently manage its working capital and convert its assets into cash in a shorter period.
- However, in the subsequent years up to December 31, 2024, there was an increase in the cash conversion cycle to 154.32 days. This suggests a longer period required to convert investments into cash compared to the prior years, potentially indicating inefficiencies in managing working capital or changes in the company's operating cycle.
Overall, while there was an initial improvement in 2021, the subsequent years saw a reversal in the trend with the cash conversion cycle increasing, indicating a potential need for Viatris Inc to focus on optimizing its working capital management to shorten the conversion cycle and enhance its liquidity position.
Peer comparison
Dec 31, 2024