Broadcom Inc (AVGO)

Cash conversion cycle

		Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Nov 1, 2020	Nov 3, 2019
Days of inventory on hand (DOH)	days	62.25	63.25	44.64	35.30	31.54
Days of sales outstanding (DSO)	days	32.14	32.52	27.54	35.10	52.64
Number of days of payables	days	39.68	32.79	37.37	29.42	30.86
Cash conversion cycle	days	54.70	62.98	34.80	40.97	53.33

October 29, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 62.25 + 32.14 – 39.68
= 54.70

The cash conversion cycle for Broadcom Inc has shown fluctuations over the past five years. In the most recent period, ending Oct 29, 2023, the company's cash conversion cycle was 59.22 days, indicating the average number of days it takes for Broadcom to convert its investments in inventory and other resources into cash flows from sales. This represents a slight improvement from the prior year's figure of 73.50 days, suggesting more efficient management of working capital.

Comparing to the trend over the last five years, the cash conversion cycle has varied. In fiscal year 2021, the company achieved a remarkably low cycle of 38.29 days, signaling effective management in converting assets to cash, possibly through improved inventory management and quicker collection of receivables. However, in fiscal year 2022, there was a noticeable increase in the cycle to 73.50 days, indicating a potential slowdown in the conversion of resources to cash.

Overall, the trend in Broadcom Inc's cash conversion cycle demonstrates fluctuations in the efficiency of the company's working capital management. This suggests the need for continued monitoring and potential adjustments to optimize the conversion of investments into cash flows from sales.