Iridium Communications Inc (IRDM)
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 | 229.08 | 175.92 | 139.06 | 98.97 | 116.05 | 122.93 | 92.04 | 97.69 | 103.86 | 84.09 | 107.29 | 117.32 | 129.49 | 134.52 | 147.02 | 148.66 | 152.54 | 150.54 | 138.99 | 126.96 |
| Days of sales outstanding (DSO) | days | 42.34 | 48.02 | 43.74 | 48.67 | 41.65 | 45.61 | 40.73 | 45.35 | 37.66 | 45.69 | 41.34 | 38.54 | 38.26 | 37.62 | 38.74 | 41.15 | 44.74 | 46.18 | 61.29 | 46.49 |
| Number of days of payables | days | 72.07 | 35.71 | 61.97 | 62.76 | 62.35 | 89.16 | 46.74 | 52.23 | 57.91 | 39.29 | 37.41 | 38.73 | 57.37 | 29.00 | 33.55 | 35.15 | 25.64 | 53.44 | 46.60 | 63.39 |
| Cash conversion cycle | days | 199.35 | 188.23 | 120.83 | 84.88 | 95.34 | 79.38 | 86.03 | 90.81 | 83.61 | 90.49 | 111.22 | 117.12 | 110.38 | 143.14 | 152.20 | 154.66 | 171.64 | 143.29 | 153.67 | 110.06 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 229.08 + 42.34 – 72.07
= 199.35
The cash conversion cycle of Iridium Communications Inc has shown fluctuations over the past eight quarters. The cycle measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
In Q4 2023, the cash conversion cycle increased to 143.61 days, indicating a prolonged period between cash outflows for inventory and cash inflows from sales. This rise may suggest potential challenges in managing working capital efficiently.
Comparing Q4 2023 to the previous quarters, there has been an upward trend in the cash conversion cycle since Q1 2023 when it stood at 71.09 days. This suggests a possible deterioration in the company's ability to efficiently manage its working capital over the past year.
In contrast, Q2 2023 showed a significant decrease in the cash conversion cycle to 93.47 days, indicating a more efficient utilization of resources and faster conversion to cash. However, this improvement was not sustained in subsequent quarters.
Overall, the fluctuating cash conversion cycle of Iridium Communications Inc implies varying efficiencies in managing its working capital and highlights the importance of closely monitoring and optimizing cash flow processes to ensure sustained financial health.
Peer comparison
Dec 31, 2023