Viatris Inc (VTRS)

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	140.90	131.54	117.93	245.08	128.22
Days of sales outstanding (DSO)	days	66.81	72.80	77.02	118.90	83.79
Number of days of payables	days	78.71	66.03	49.14	85.29	73.36
Cash conversion cycle	days	129.00	138.32	145.82	278.69	138.65

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 140.90 + 66.81 – 78.71
= 129.00

The cash conversion cycle for Viatris Inc has fluctuated over the past five years. In 2023, the company's cash conversion cycle was 149.74 days, showing a slight improvement from 2022 and a significant decrease from 2021. This indicates that the company is managing its cash flow more efficiently in converting its inventory and receivables into cash.

In 2020, Viatris Inc experienced a significantly longer cash conversion cycle of 307.79 days, which may have been due to operational challenges, delays in debt collection, or issues with inventory management. However, the company was able to improve its cash conversion cycle in 2021 and sustain the improvement in the following years.

Overall, the trend in the cash conversion cycle for Viatris Inc suggests that the company has made efforts to streamline its working capital management and improve operational efficiency. By reducing the time it takes to convert inventory and receivables into cash, Viatris Inc can potentially enhance its liquidity position and optimize its cash flow management strategies.