Motorola Solutions Inc (MSI)

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	44.40	58.06	49.92	34.27	28.95
Days of sales outstanding (DSO)	days	64.83	63.01	64.62	71.20	68.96
Number of days of payables	days	47.30	58.45	53.91	41.28	40.02
Cash conversion cycle	days	61.93	62.63	60.63	64.19	57.89

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 44.40 + 64.83 – 47.30
= 61.93

The cash conversion cycle of Motorola Solutions Inc has shown variability over the past five years. In 2023, the company's cash conversion cycle was 49.88 days, indicating a slight improvement from 2022 when it stood at 51.33 days. This implies that the company took fewer days to convert its investments in inventory and other resources into cash in 2023 compared to the previous year.

However, when compared to 2021, where the cash conversion cycle was 35.58 days, there was a notable increase in 2023, suggesting a lengthening of the cycle. This increase in the cash conversion cycle may be due to factors such as changes in inventory management, payment terms with suppliers, or collection policies with customers.

Looking back further, in 2020, the cash conversion cycle was 42.73 days, and in 2019, it was 34.71 days. Therefore, it is evident that there have been fluctuations in the efficiency of Motorola Solutions Inc's cash conversion cycle over the years, with varying levels of effectiveness in managing its working capital.

Overall, analyzing the trend in the cash conversion cycle can provide insights into how efficiently the company is managing its operating cycle and working capital, highlighting areas that may require improvement to enhance cash flow and overall financial performance.