Arlo Technologies (ARLO)
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 | 31.38 | 35.24 | 32.24 | 58.56 | 56.80 |
| Days of sales outstanding (DSO) | days | 47.99 | 48.80 | 66.66 | 79.11 | 108.78 |
| Number of days of payables | days | 45.09 | 39.46 | 70.63 | 56.27 | 92.42 |
| Cash conversion cycle | days | 34.27 | 44.58 | 28.27 | 81.40 | 73.17 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 31.38 + 47.99 – 45.09
= 34.27
The cash conversion cycle of Arlo Technologies Inc has exhibited fluctuations over the past five years. In 2023, the cash conversion cycle improved significantly to 29.63 days from 43.35 days in 2022. This indicates that the company was able to more efficiently convert its investments in inventory and accounts receivable into cash during the most recent fiscal year.
Comparing with previous years, the cash conversion cycle was relatively low in 2021 at 15.74 days, suggesting a shorter time frame in converting resources into cash. However, in 2020 and 2019, the company experienced longer cash conversion cycles of 82.41 days and 78.60 days respectively, indicating inefficiencies in managing cash flow and working capital.
Overall, the decreasing trend in the cash conversion cycle since 2022 reflects improved efficiency in managing working capital and converting resources into cash. This trend suggests that Arlo Technologies Inc has been more effective in optimizing its operations and controlling its cash flow in recent years.
Peer comparison
Dec 31, 2023