Cadence Design Systems Inc (CDNS)

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	65.14	50.99	51.63	37.25	29.71
Days of sales outstanding (DSO)	days	44.11	50.26	41.52	46.42	48.15
Number of days of payables	days	—	—	—	—	—
Cash conversion cycle	days	109.25	101.25	93.16	83.66	77.86

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 65.14 + 44.11 – —
= 109.25

The cash conversion cycle for Cadence Design Systems, Inc. has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle was 119.56 days, indicating an improvement from the previous year's cycle of 175.60 days. This suggests that the company was able to manage its cash more efficiently in 2023.

Comparing to earlier years, in 2022, the cash conversion cycle was 178.82 days, which was higher than the 2021 cycle of 136.80 days. However, it was lower than the cycle in 2020, which was 124.05 days. This indicates fluctuations in the company's efficiency in managing its working capital and cash flow over the years.

Overall, the trend in Cadence Design Systems, Inc.'s cash conversion cycle shows variability with some improvement in 2023 compared to the previous year. It is important for the company to continue monitoring and managing its cash conversion cycle effectively to optimize its working capital and overall financial performance.