MACOM Technology Solutions Holdings Inc (MTSI)

Cash conversion cycle

		Sep 30, 2024	Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020
Days of inventory on hand (DOH)	days	211.40	189.44	155.99	113.88	128.63
Days of sales outstanding (DSO)	days	52.88	51.37	54.90	50.86	31.60
Number of days of payables	days	46.96	34.70	41.70	39.54	32.36
Cash conversion cycle	days	217.32	206.11	169.19	125.20	127.87

September 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 211.40 + 52.88 – 46.96
= 217.32

The cash conversion cycle of MACOM Technology Solutions Holdings Inc has shown a mixed trend over the past five years. In fiscal year 2020, the company had a cash conversion cycle of 127.87 days, indicating that, on average, it took the company approximately 127.87 days to convert its investments in inventory and accounts receivable into cash.

Over the subsequent years, the cash conversion cycle increased steadily, reaching 169.19 days in fiscal year 2022. This increase suggests that MACOM experienced challenges in efficiently managing its working capital, potentially leading to longer times to convert inventory and receivables into cash.

However, there was a notable improvement in fiscal year 2023, with the cash conversion cycle decreasing to 125.20 days. This suggests that the company may have implemented strategies to streamline its working capital management processes, leading to a more efficient conversion of investments into cash.

The most recent data for fiscal year 2024 shows a slight increase in the cash conversion cycle to 217.32 days. This increase may indicate that MACOM faced renewed challenges in working capital management or experienced shifts in its operating environment that impacted the efficiency of cash conversion.

Overall, the trend in MACOM's cash conversion cycle demonstrates fluctuations in working capital efficiency over the past five years, highlighting the importance of closely monitoring and managing factors affecting the company's cash conversion cycle.