Illumina Inc (ILMN)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Days of inventory on hand (DOH)	days	132.13	132.35	121.67	122.79	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
Days of sales outstanding (DSO)	days	61.36	58.12	52.83	51.59	59.48	56.41	60.63	—	53.44	—	—	—	52.26	—	—	—	—	—	—	—
Number of days of payables	days	53.39	44.04	43.16	42.26	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
Cash conversion cycle	days	140.11	146.43	131.33	132.11	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

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 of Illumina Inc has fluctuated over the years, indicating changes in the efficiency of the company's working capital management. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

From March 2020 to December 2020, the cash conversion cycle decreased steadily from 87.96 days to 63.42 days, indicating an improvement in efficiency during this period. However, in the following quarters, the cycle fluctuated, with some periods showing a further decrease in days while others showed an increase.

Notably, there was a significant spike in the cash conversion cycle in June 2023 to 141.43 days, suggesting possible challenges in managing working capital effectively during that period. Subsequently, there were further fluctuations until December 2024, where the cycle stood at 140.11 days.

Overall, it is essential for Illumina Inc to closely monitor and manage its cash conversion cycle to ensure optimal utilization of resources and maintain healthy cash flows for sustainable operations and growth.