Cadence Design Systems Inc (CDNS)

Cash conversion cycle

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	65.33	59.99	52.37	49.28	51.00	46.77	45.57	48.26	51.73	45.84	42.27	36.79	37.25	24.49	22.69	32.13	30.66	38.55	29.50	21.97
Days of sales outstanding (DSO)	days	44.10	40.14	42.76	48.82	50.25	41.84	43.81	42.14	41.52	40.39	49.57	51.03	46.42	43.97	47.41	44.11	48.15	43.91	38.76	44.46
Number of days of payables	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Cash conversion cycle	days	109.43	100.13	95.13	98.11	101.25	88.61	89.39	90.40	93.26	86.22	91.83	87.82	83.66	68.47	70.11	76.25	78.81	82.46	68.27	66.43

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 65.33 + 44.10 – —
= 109.43

The cash conversion cycle of Cadence Design Systems, Inc. has experienced fluctuations over the quarters provided. In Q4 2023, the company's cash conversion cycle stood at 119.56 days, reflecting an improvement compared to the previous quarter at 180.47 days. This suggests that the company took fewer days to convert its investments in inventory and other resources into cash during this period.

The trend in Q2 and Q3 of 2023 showed a relatively stable cash conversion cycle, with values of 168.93 days and 165.32 days, respectively. This may indicate that the company maintained a consistent efficiency in managing its working capital during those quarters.

Looking back at Q4 2022, there was a slight increase in the cash conversion cycle to 175.60 days from 161.50 days in Q3 2022. However, the trend in the first two quarters of 2022 showed improvements, with values of 158.83 days and 167.23 days, respectively.

Overall, Cadence Design Systems, Inc. has shown fluctuations in its cash conversion cycle, but the recent decrease in Q4 2023 compared to the previous quarter suggests potential improvements in managing its working capital efficiency. Monitoring and managing this cycle effectively are crucial for the company's financial health and operational performance.