Illumina Inc (ILMN)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	121.74	128.61	114.66	131.06	121.78
Days of sales outstanding (DSO)	days	59.48	53.43	52.26	54.88	59.03
Number of days of payables	days	50.81	66.34	88.32	67.64	50.54
Cash conversion cycle	days	130.41	115.70	78.60	118.30	130.27

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 121.74 + 59.48 – 50.81
= 130.41

The cash conversion cycle of Illumina Inc has fluctuated over the past five years. In 2023, the company's cash conversion cycle was 139.04 days, which represents the number of days it takes for Illumina to convert its investments in inventory and other resources into cash flows from sales. This increase from the previous year indicates that Illumina may be taking longer to convert its working capital into cash.

Comparing this to 2022, the cash conversion cycle was 123.18 days, showing an improvement in the efficiency of Illumina's cash conversion process. However, in 2021, the company's cash conversion cycle was 80.03 days, reflecting a much shorter period for Illumina to generate cash from its operations, indicating efficient management of working capital.

The cash conversion cycle increased in 2021 from the previous year, when it was 120.06 days, suggesting potential challenges in managing working capital efficiently. Looking back to 2019, the cash conversion cycle was 132.59 days, indicating a longer process for Illumina to convert investments into cash flows.

Overall, the trend in Illumina's cash conversion cycle shows some variability, with fluctuations indicating changes in the company's ability to efficiently manage its working capital and convert investments into cash. Further analysis of the underlying factors influencing these changes would provide deeper insights into Illumina's operational and financial performance.