Micron Technology Inc (MU)
Cash conversion cycle
| Aug 29, 2024 | Aug 31, 2023 | Sep 1, 2022 | Sep 2, 2021 | Sep 3, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 155.10 | 167.85 | 133.94 | 87.05 | 122.25 |
| Days of sales outstanding (DSO) | days | 95.93 | 58.64 | 61.34 | 70.38 | 67.09 |
| Number of days of payables | days | 53.11 | 42.13 | 52.73 | 40.54 | 53.63 |
| Cash conversion cycle | days | 197.92 | 184.36 | 142.55 | 116.88 | 135.71 |
August 29, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 155.10 + 95.93 – 53.11
= 197.92
The cash conversion cycle of Micron Technology Inc has exhibited fluctuations over the past five years. It has increased from 116.88 days in 2021 to 197.92 days in 2024, indicating a longer period for the company to convert its resources invested in inventory back into cash. This trend suggests potential inefficiencies in managing the company's working capital and operations, as an increasing cash conversion cycle could tie up cash flow and hinder liquidity.
In 2022, there was a notable decrease in the cash conversion cycle to 142.55 days, possibly due to improved inventory management or quicker collection of receivables. However, the cycle lengthened again in 2023 before reaching its highest point in 2024. These fluctuations highlight the importance of closely monitoring working capital components such as inventory, accounts receivable, and accounts payable to optimize the cash conversion cycle and enhance overall efficiency in cash management.
Overall, the trend in Micron Technology Inc's cash conversion cycle indicates a need for continued attention to working capital management to ensure the timely conversion of resources into cash, thereby supporting the company's financial health and operational performance.
Peer comparison
Aug 29, 2024