Ciena Corp (CIEN)
Cash conversion cycle
| Nov 2, 2024 | Jul 27, 2024 | Apr 27, 2024 | Jan 27, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Jan 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 130.46 | 150.43 | 158.49 | 145.08 | 152.95 | 181.22 | 173.50 | 194.34 | 166.75 | 143.73 | 93.96 | 85.23 | 71.95 | 76.84 | 83.36 | 78.33 | 67.14 | 69.29 | 64.62 | 68.03 |
| Days of sales outstanding (DSO) | days | 86.78 | 85.56 | 77.40 | 74.05 | 86.31 | 87.63 | 97.68 | 102.45 | 94.93 | 80.56 | 75.37 | 79.46 | 91.07 | 95.98 | — | 76.68 | 77.81 | — | — | 95.91 |
| Number of days of payables | days | 67.33 | 50.81 | 51.47 | 46.56 | 46.26 | 59.74 | 70.27 | 78.93 | 90.89 | 76.37 | 61.78 | 57.76 | 68.47 | 62.60 | 58.01 | 49.69 | 56.91 | 56.63 | 57.96 | 70.65 |
| Cash conversion cycle | days | 149.91 | 185.18 | 184.42 | 172.57 | 193.00 | 209.11 | 200.90 | 217.86 | 170.79 | 147.93 | 107.55 | 106.93 | 94.55 | 110.21 | 25.34 | 105.32 | 88.04 | 12.66 | 6.66 | 93.29 |
November 2, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 130.46 + 86.78 – 67.33
= 149.91
The cash conversion cycle of Ciena Corp has exhibited fluctuations over the past several quarters. The company's cash conversion cycle, which represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales, ranged from 6.66 days to 217.86 days over the last few quarters.
In general, a shorter cash conversion cycle is preferable as it indicates that the company is able to efficiently manage its working capital and turn its inventory into cash quickly. On the other hand, a longer cash conversion cycle suggests inefficiencies in managing inventory, accounts receivable, and accounts payable.
In the most recent quarter, the cash conversion cycle stood at 149.91 days, showing an improvement from the previous quarter. However, it is still higher than the cycle observed in some of the earlier quarters. This trend suggests that Ciena Corp may need to focus on optimizing its inventory management, sales, and collection processes to shorten the cash conversion cycle and improve its cash flow efficiency.
Overall, a detailed analysis of the components of the cash conversion cycle, such as days inventory outstanding, days sales outstanding, and days payable outstanding, would provide further insights into the company's working capital management practices and potential areas for improvement.
Peer comparison
Nov 2, 2024