Harmonic Inc (HLIT)
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 | 66.83 | 84.72 | 90.97 | 105.89 | 96.86 | 79.71 | 69.44 | 73.01 | 67.32 | 51.47 | 44.88 | 39.61 | 41.14 | 43.29 | 38.16 | 40.48 | 34.58 | 35.66 | 33.07 | 34.43 |
| Days of sales outstanding (DSO) | days | 85.86 | 67.41 | 69.57 | 51.37 | 64.12 | 62.98 | — | — | 64.52 | — | — | — | 66.88 | 88.26 | 72.42 | 94.58 | 89.94 | 103.69 | 69.40 | 62.57 |
| Number of days of payables | days | 30.69 | 38.48 | 29.72 | 44.57 | 54.02 | 49.01 | 32.37 | 46.87 | 60.92 | 32.11 | 39.24 | 40.28 | 27.65 | 37.12 | 32.38 | 52.44 | 48.73 | 38.44 | 38.09 | 29.86 |
| Cash conversion cycle | days | 122.01 | 113.65 | 130.82 | 112.69 | 106.96 | 93.68 | 37.08 | 26.14 | 70.92 | 19.36 | 5.64 | -0.68 | 80.37 | 94.43 | 78.20 | 82.61 | 75.78 | 100.91 | 64.39 | 67.13 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 66.83 + 85.86 – 30.69
= 122.01
The cash conversion cycle is a measure of how efficiently a company manages its working capital by evaluating the time it takes to convert its investments in inventory and other resources into cash inflows from sales.
Analyzing the data provided for Harmonic, Inc., we observe fluctuations in the cash conversion cycle over the past eight quarters. The trend indicates that the company's efficiency in managing working capital has been inconsistent during this period.
In Q4 2023, the cash conversion cycle increased to 141.11 days compared to 138.13 days in Q3 2023. This suggests that the company took longer to convert its investments into cash during this quarter. The increase in the cash conversion cycle may be due to factors such as slower inventory turnover or longer accounts receivable collection periods.
Looking at Q2 2023, the cash conversion cycle spiked to 161.59 days, indicating a significant delay in the company's cash conversion process. This could be a signal of inefficiencies in managing working capital, leading to potential liquidity challenges.
On the contrary, in Q3 2022, Harmonic, Inc. managed to reduce its cash conversion cycle to 107.66 days, reflecting a period of improved efficiency in working capital management. This suggests that the company was able to streamline its processes and convert investments into cash more swiftly during this quarter.
Overall, it is crucial for Harmonic, Inc. to closely monitor its cash conversion cycle and strive for consistency in improving efficiency in working capital management. By doing so, the company can enhance its financial health, optimize cash flow, and strengthen its overall operations.
Peer comparison
Dec 31, 2023