Cadence Design Systems Inc (CDNS)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Days of inventory on hand (DOH)	days	239.51	243.84	126.41	152.00	150.69	140.78	126.59	116.91	125.72	119.93	115.28	125.37	137.60	119.28	104.34	88.75	90.75	57.36	56.46	81.82
Days of sales outstanding (DSO)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Cash conversion cycle	days	239.51	243.84	126.41	152.00	150.69	140.78	126.59	116.91	125.72	119.93	115.28	125.37	137.60	119.28	104.34	88.75	90.75	57.36	56.46	81.82

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 239.51 + — – —
= 239.51

The cash conversion cycle of Cadence Design Systems Inc has shown fluctuations over the years. The cycle represents the time it takes for the company to convert its investments in inventory into cash flows from customers.

From March 31, 2020, to December 31, 2024, the cash conversion cycle varied between 56.46 days to 243.84 days. It reached its peak at 243.84 days on September 30, 2024, suggesting an extended period for the company to convert its inventory investments into cash.

While the cycle has shown volatility, it is important for Cadence Design Systems Inc to focus on managing their inventory levels, accounts receivable, and accounts payable efficiently to improve their cash conversion cycle. A lower cycle indicates that the company is converting its investments into cash quickly, which could positively impact its liquidity and working capital management.