Dolby Laboratories (DLB)
Cash conversion cycle
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 85.22 | 60.80 | 30.78 | 63.66 | 73.36 |
| Days of sales outstanding (DSO) | days | 115.88 | 102.03 | 94.04 | 76.17 | 72.41 |
| Number of days of payables | days | 50.06 | 36.59 | 49.91 | 31.44 | 34.52 |
| Cash conversion cycle | days | 151.04 | 126.25 | 74.91 | 108.39 | 111.25 |
September 30, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 85.22 + 115.88 – 50.06
= 151.04
The cash conversion cycle of Dolby Laboratories has fluctuated over the past five years. In 2023, the cash conversion cycle increased to 151.04 days from 126.25 days in 2022, indicating a lengthening of the time it takes for the company to convert its investments in inventory and other resources into cash from sales. This may suggest potential inefficiencies in inventory management or delays in collecting receivables.
Compared to 2021 where the cash conversion cycle was 74.91 days, the current cycle in 2023 is significantly longer, indicating a potential deterioration in the company's working capital management efficiency.
In 2020 and 2019, the cash conversion cycle was 108.39 days and 111.25 days respectively, showing relatively stable performance in terms of converting assets into cash during those years.
Overall, Dolby Laboratories' cash conversion cycle has shown variability, with the current cycle in 2023 at its highest level over the past five years. Further analysis of the components of the cash conversion cycle, such as inventory turnover and accounts receivable collection period, may provide insights into specific areas that require attention to improve the company's cash conversion efficiency.
Peer comparison
Sep 30, 2023