MaxLinear Inc (MXL)

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	118.55	124.55	121.22	134.35	76.93
Days of sales outstanding (DSO)	days	89.83	55.71	48.97	51.43	58.01
Number of days of payables	days	25.57	53.20	48.76	44.97	32.82
Cash conversion cycle	days	182.81	127.05	121.43	140.81	102.13

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 118.55 + 89.83 – 25.57
= 182.81

The cash conversion cycle of MaxLinear Inc has displayed fluctuations over the last five years. At the end of 2023, the cash conversion cycle increased to 182.81 days from 127.05 days in 2022, indicating a delay in the company's conversion of resources into cash. This increase was driven by changes in the company's accounts receivable, inventory, and accounts payable management.

The significant variability in the cash conversion cycle suggests that the company may be experiencing challenges in efficiently managing its working capital. It is important for MaxLinear Inc to assess and improve its cash conversion cycle, as a prolonged cycle can tie up valuable resources and negatively impact the company's liquidity and profitability. Additionally, the company should focus on streamlining its inventory management, optimizing accounts receivable collection, and effectively managing accounts payable to shorten its cash conversion cycle and enhance its overall financial performance.