NXP Semiconductors NV (NXPI)

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
Days of inventory on hand (DOH)	days	136.10	138.03	135.68	127.04	114.35	103.07	98.84	93.04	86.87	87.68	85.18	84.43	85.89	91.38	107.95	102.84
Days of sales outstanding (DSO)	days	24.58	26.03	29.39	—	26.54	—	—	—	30.45	—	—	—	32.42	—	—	—
Number of days of payables	days	74.24	61.85	62.27	64.39	76.04	100.00	98.84	97.16	91.47	85.21	89.07	82.59	82.64	59.86	64.09	75.01
Cash conversion cycle	days	86.44	102.21	102.80	62.65	64.85	3.06	0.00	-4.12	25.85	2.47	-3.89	1.84	35.68	31.52	43.87	27.83

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 136.10 + 24.58 – 74.24
= 86.44

The cash conversion cycle of NXP Semiconductors NV has shown some variability over the quarters analyzed. In Q4 2023, the company's cash conversion cycle was 86.44 days, indicating that it took approximately 86.44 days for the company to convert its investments in raw materials into cash received from sales. This was an improvement from the previous quarter, Q3 2023, where the cycle was 102.21 days.

Looking at the trend over the past year, we can see that the cash conversion cycle has generally increased from Q1 2022 (24.91 days) to Q4 2023. This indicates that NXP Semiconductors NV may be facing challenges in managing its working capital efficiently or facing delays in the collection of receivables or the payment of payables.

The company should focus on optimizing its inventory management, speeding up its collection of receivables, and possibly negotiating better payment terms with suppliers to improve its cash conversion cycle and enhance its overall liquidity position.