Dolby Laboratories (DLB)
Cash conversion cycle
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 87.62 | 85.22 | 60.80 | 30.78 | 63.66 |
| Days of sales outstanding (DSO) | days | 140.20 | 115.88 | 102.03 | 94.04 | 76.17 |
| Number of days of payables | days | 45.15 | 50.06 | 36.59 | 49.91 | 31.44 |
| Cash conversion cycle | days | 182.68 | 151.04 | 126.25 | 74.91 | 108.39 |
September 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 87.62 + 140.20 – 45.15
= 182.68
The cash conversion cycle of Dolby Laboratories has demonstrated fluctuations over the past five years. From September 30, 2020, to September 30, 2021, there was a notable increase in the cash conversion cycle from 108.39 days to 74.91 days, indicating a potential improvement in the company's efficiency in managing its cash flows and working capital. However, this trend reversed in the subsequent years as the cash conversion cycle increased significantly to 126.25 days in 2022, 151.04 days in 2023, and further to 182.68 days in 2024.
These fluctuations suggest that Dolby Laboratories may have faced challenges in managing its cash flows and working capital effectively in the recent years. A lengthening cash conversion cycle could indicate issues with inventory management, accounts receivable collection, or payment of accounts payable, which may impact the company's liquidity and operational efficiency.
It is essential for Dolby Laboratories to closely monitor and address the factors contributing to the prolonged cash conversion cycle to optimize its working capital management and enhance overall financial performance in the future.
Peer comparison
Sep 30, 2024