Calix Inc (CALX)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 99.21 | 93.12 | 125.91 | 100.50 | 69.57 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 99.21 | 93.12 | 125.91 | 100.50 | 69.57 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 99.21 + — – —
= 99.21
The cash conversion cycle is a key metric that indicates the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. Analyzing the cash conversion cycle of Calix Inc from the provided data reveals some interesting insights.
1. In December 31, 2020, Calix Inc had a cash conversion cycle of 69.57 days. This suggests that the company was efficient in managing its working capital during that period, with a relatively quick conversion of inventory into sales and then into cash.
2. However, by December 31, 2021, the cash conversion cycle increased to 100.50 days. This indicates that Calix Inc took longer to turn its resources into cash, which may imply potential issues in inventory management or collection of receivables.
3. The trend continues with a further increase in the cash conversion cycle to 125.91 days by December 31, 2022. This significant rise may signal inefficiencies in the company's operations or challenges in managing its working capital effectively.
4. Despite the sharp increase in 2022, there was a slight improvement in the cash conversion cycle by December 31, 2023, standing at 93.12 days. This improvement suggests that the company may have implemented strategies to optimize its working capital management.
5. Finally, by December 31, 2024, the cash conversion cycle was 99.21 days, indicating a slight increase from the previous year. Although it was lower than the peak in 2022, Calix Inc might still need to focus on improving its efficiency in converting resources to cash.
In conclusion, the fluctuation in Calix Inc's cash conversion cycle over the years indicates varying levels of working capital management effectiveness. Continuous monitoring and improvement in managing inventory, accounts receivable, and accounts payable are crucial for optimizing the cash conversion cycle and enhancing the company's overall financial performance.
Peer comparison
Dec 31, 2024