CVS Health's Days Sales Outstanding for the
three
months ended in Dec. 2023 was 10.86.
CVS Health's Days Inventory for the
three
months ended in Dec. 2023 was 20.54.
CVS Health's Days Payable for the
three
months ended in Dec. 2023 was 16.99.
Therefore, CVS Health's Cash Conversion Cycle (CCC) for the
three
months ended in Dec. 2023 was 14.41.
CVS Health Cash Conversion Cycle Historical Data
The historical data trend for CVS Health's Cash Conversion Cycle can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of CVS Health's Cash Conversion Cycle
For the Healthcare Plans subindustry, CVS Health's Cash Conversion Cycle, along with its competitors' market caps and Cash Conversion Cycle data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
CVS Health's Cash Conversion Cycle Distribution in the Healthcare Plans Industry
For the Healthcare Plans industry and Healthcare sector, CVS Health's Cash Conversion Cycle distribution charts can be found below:
* The bar in red indicates where CVS Health's Cash Conversion Cycle falls into.
CVS Health Cash Conversion Cycle Calculation
Cash Conversion Cycle (CCC) measures how fast a company can convert cash on hand into even more cash on hand. This metric looks at the amount of time needed to sell inventory, the amount of time needed to collect receivables and the length of time the company is afforded to pay its bills without incurring penalties.
Cash Conversion Cycle is one of several measures of management effectiveness.
CVS Health's Cash Conversion Cycle for the fiscal year that ended in Dec. 2023 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
CVS Health (NYSE:CVS) Cash Conversion Cycle Explanation
Generally, the lower this number is, the better for the company. Although it should be combined with other metrics (such as ROE % and ROA %), it can be especially useful for comparing close competitors, because the company with the lowest CCC is often the one with better management.
Be Aware
CCC is most effective with retail-type companies, which have inventories that are sold to customers. Consulting businesses, software companies and insurance companies are all examples of companies for whom this metric is meaningless.
The CCC is one of several tools that can help you evaluate management, especially if it is calculated for several consecutive time periods and for several competitors. Decreasing or steady CCCs are good, while rising ones should motivate you to dig a bit deeper.
CVS Health Cash Conversion Cycle Related Terms
Thank you for viewing the detailed overview of CVS Health's Cash Conversion Cycle provided by GuruFocus.com. Please click on the following links to see related term pages.
CVS Health offers a diverse set of healthcare services. Its roots are in its retail pharmacy operations, where it operates over 9,000 stores primarily in the U.S. CVS is also the largest pharmacy benefit manager (acquired through Caremark), processing over 2 billion adjusted claims annually. It also operates a top-tier health insurer (acquired through Aetna) where it serves about 26 million medical members. The company's recent acquisition of Oak Street adds primary care services to the mix, which could have significant synergies with all its existing business lines.
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