ADEIA CORP (ADEA)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	13.00	—	2.95	7.40
Days of sales outstanding (DSO)	days	107.56	109.96	206.53	175.74
Number of days of payables	days	17.71	5.24	0.26	9.83
Cash conversion cycle	days	102.84	104.72	209.22	173.31

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 13.00 + 107.56 – 17.71
= 102.84

The cash conversion cycle of ADEIA CORP has fluctuated over the past four years. In 2023, the company's cash conversion cycle improved to 102.84 days from 104.72 days in the previous year. This indicates that the company took less time to convert its investments in inventory and accounts receivable into cash.

Comparing to 2021 and 2020, where the cash conversion cycle was significantly higher at 209.22 days and 173.31 days respectively, the recent improvement is positive for the company. A decreasing cash conversion cycle suggests that ADEIA CORP is managing its working capital more efficiently and potentially generating cash more quickly through its operational activities.

Overall, the trend in the cash conversion cycle for ADEIA CORP reflects improvements in its operating efficiency and liquidity management over the years, which can be a positive indicator of the company's financial health and performance.