Viatris Inc (VTRS)

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
Days of inventory on hand (DOH)	days	140.90	143.35	140.97	140.31	131.54	123.89	124.49	121.28	117.93	119.84	145.16	185.22	233.85
Days of sales outstanding (DSO)	days	66.81	76.25	73.08	69.81	72.80	61.74	67.60	73.57	77.02	81.67	90.77	103.20	113.46
Number of days of payables	days	78.71	77.65	75.95	74.96	66.03	48.03	57.55	47.89	49.14	48.72	58.23	76.57	81.38
Cash conversion cycle	days	129.00	141.95	138.09	135.17	138.32	137.61	134.53	146.95	145.82	152.79	177.70	211.84	265.93

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 measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A lower number is generally preferred, as it indicates faster conversion of investments into cash.

For Viatris Inc, the cash conversion cycle has shown some fluctuations throughout the quarters. In the most recent quarter, Q4 2023, the company's cash conversion cycle was 149.74 days, which was slightly lower compared to the previous quarter. This suggests that the company was able to manage its working capital more efficiently and convert its investments into cash at a slightly faster rate.

Looking at the trend over the last year, Viatris Inc's cash conversion cycle has varied between 146.15 days and 158.06 days. The company experienced the longest cash conversion cycle in Q1 2022 at 158.06 days, indicating slower conversion of investments into cash during that period.

Overall, Viatris Inc's cash conversion cycle has shown some variability but has generally remained within a relatively stable range over the quarters analyzed. Further analysis and comparison with industry standards may provide additional insights into the company's working capital efficiency.