Motorola Solutions Inc (MSI)

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	47.43	55.70	58.35	62.60	58.04	65.95	64.30	58.70	49.92	38.96	36.93	36.17	34.73	33.09	29.96	28.94	29.34	32.28	32.63	35.79
Days of sales outstanding (DSO)	days	64.34	63.16	58.49	—	63.01	—	—	—	64.62	—	—	—	—	—	—	—	—	—	—	—
Number of days of payables	days	50.53	41.94	38.67	41.60	58.42	50.45	55.17	50.99	53.91	40.00	36.14	33.03	41.84	36.27	33.22	34.77	40.57	39.09	41.86	46.99
Cash conversion cycle	days	61.25	76.93	78.17	21.00	62.63	15.51	9.12	7.71	60.63	-1.03	0.79	3.14	-7.11	-3.18	-3.27	-5.83	-11.23	-6.81	-9.23	-11.20

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 47.43 + 64.34 – 50.53
= 61.25

The cash conversion cycle of Motorola Solutions Inc has fluctuated over the past eight quarters, ranging from a low of 47.16 days in Q1 2022 to a high of 72.28 days in Q2 2023. In general, a shorter cash conversion cycle is preferred as it indicates that the company is able to efficiently convert its investments in inventory and other resources into cash flow from sales.

The trend in Motorola Solutions Inc's cash conversion cycle seems to have worsened recently, with Q2 2023 showing an increase to 72.28 days from 55.24 days in Q2 2022. This may suggest that the company is taking longer to convert its investments into cash or is facing challenges in managing its working capital effectively.

Overall, management should closely monitor the components of the cash conversion cycle, including the days inventory outstanding, days sales outstanding, and days payable outstanding, to identify areas for improvement and work towards optimizing the company's cash flow efficiency.