Illumina Inc (ILMN)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	132.13	121.74	128.61	114.66	131.06
Days of sales outstanding (DSO)	days	61.36	59.48	53.43	52.26	54.88
Number of days of payables	days	53.39	50.81	66.34	88.32	67.64
Cash conversion cycle	days	140.11	130.41	115.70	78.60	118.30

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 132.13 + 61.36 – 53.39
= 140.11

The cash conversion cycle (CCC) of Illumina Inc has shown fluctuations over the past five years. As of December 31, 2020, the company had a CCC of 118.30 days, reflecting the time it takes to convert its investments in inventory and other resources into cash flows from sales.

Subsequently, the CCC decreased to 78.60 days by December 31, 2021, indicating an improvement in the company's efficiency in managing its working capital. However, by the end of 2022, the CCC increased to 115.70 days, signaling a potential delay in the conversion of investments into cash.

By December 31, 2023, the CCC further extended to 130.41 days, suggesting a longer time period for Illumina Inc to collect cash from its operations. The latest data point as of December 31, 2024, shows a CCC of 140.11 days, the highest in the series, indicating a potential slowdown in the company's cash conversion efficiency.

Overall, the trend in Illumina Inc's CCC indicates fluctuations in working capital management efficiency over the years, with periods of improvement followed by potential setbacks. Monitoring the CCC can provide insights into the company's operational efficiency and liquidity management.