NXP Semiconductors NV (NXPI)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 156.49 | 136.10 | 114.35 | 86.87 | 85.89 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 156.49 | 136.10 | 114.35 | 86.87 | 85.89 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 156.49 + — – —
= 156.49
The cash conversion cycle (CCC) of NXP Semiconductors NV has been increasing over the years, starting at 85.89 days as of December 31, 2020, and reaching 156.49 days by December 31, 2024. The CCC measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
The upward trend in NXP's CCC indicates that the company is taking longer to convert its investments into cash, which may signal potential issues in managing its working capital efficiently. A longer CCC could lead to cash flow challenges, increased financing costs, and reduced liquidity.
It is crucial for NXP Semiconductors NV to closely monitor and actively manage its cash conversion cycle to ensure optimal working capital management and sustainable financial performance. Strategies to improve the CCC could include streamlining inventory management, optimizing accounts receivable collection, and negotiating favorable payment terms with suppliers.
Peer comparison
Dec 31, 2024