Illumina Inc (ILMN)

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	121.81	130.36	133.65	130.74	128.61	128.89	124.14	116.89	114.58	111.39	111.50	118.10	131.06	151.02	159.73	132.98	121.78	143.18	144.62	143.22
Days of sales outstanding (DSO)	days	59.48	56.41	60.63	—	53.44	—	—	—	52.26	—	—	—	—	—	—	—	—	—	—	—
Number of days of payables	days	50.84	50.87	52.85	53.99	66.34	64.79	67.58	73.15	88.26	68.89	58.68	57.75	67.64	56.77	49.57	45.02	50.54	49.10	47.86	47.62
Cash conversion cycle	days	130.45	135.89	141.43	76.75	115.71	64.10	56.56	43.74	78.58	42.50	52.81	60.35	63.42	94.25	110.16	87.96	71.24	94.08	96.76	95.60

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 121.81 + 59.48 – 50.84
= 130.45

The cash conversion cycle for Illumina Inc has been fluctuating over the past eight quarters, ranging from a low of 95.32 days in Q1 2022 to a high of 151.62 days in Q2 2023. Generally, a longer cash conversion cycle indicates that the company is taking longer to convert its investments in inventory and other resources into cash inflows from sales.

In Q4 2023, the cash conversion cycle was 139.04 days, showing a slight improvement from the previous quarter. This can be attributed to either a decrease in the time it takes for the company to sell its inventory or an increase in the time it takes for the company to pay its suppliers. A decrease in the cash conversion cycle is generally preferable as it indicates that the company is operating more efficiently.

Overall, the trend in Illumina Inc's cash conversion cycle appears to be somewhat erratic, with fluctuations observed in the recent quarters. It would be advisable for the company to closely monitor and manage its working capital components to ensure a more consistent and optimized cash conversion cycle in the future.