Qualcomm Incorporated (QCOM)

Cash conversion cycle

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Days of inventory on hand (DOH)	days	147.71	124.20	82.61	102.46	59.43
Days of sales outstanding (DSO)	days	19.97	34.75	24.19	41.85	15.94
Number of days of payables	days	43.98	74.35	70.38	88.66	58.07
Cash conversion cycle	days	123.71	84.60	36.43	55.65	17.30

September 30, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 147.71 + 19.97 – 43.98
= 123.71

The cash conversion cycle of Qualcomm Incorporated has experienced fluctuations over the past five years. In Sep 2023, the cash conversion cycle stood at 123.71 days, indicating that it took the company approximately 123.71 days to convert its investments in raw materials into cash from sales. This represents an increase from the previous year's figure of 84.60 days, implying a longer cash conversion cycle for the company.

Compared to Sep 2021 and 2020, where the cash conversion cycle was 36.43 days and 55.65 days respectively, the current figure of 123.71 days appears significantly higher. This suggests that Qualcomm may be facing challenges in efficiently managing its working capital and converting its assets into cash.

In contrast, the cash conversion cycle was even lower in Sep 2019 at 17.30 days, indicating a shorter period for Qualcomm to convert its investments into cash. The increase in the cash conversion cycle over the years may signal potential inefficiencies in the company's operations or changes in its business model.

It is essential for Qualcomm to closely monitor and manage its cash conversion cycle to ensure that it optimizes its working capital and cash flows effectively. A longer cash conversion cycle can tie up valuable resources and impact the company's liquidity and financial performance.