Qorvo Inc (QRVO)

Cash conversion cycle

		Mar 31, 2025	Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021
Days of inventory on hand (DOH)	days	107.16	113.70	127.95	116.91	86.94
Days of sales outstanding (DSO)	days	37.95	41.38	31.14	44.69	41.58
Number of days of payables	days	43.58	40.48	33.84	50.73	53.74
Cash conversion cycle	days	101.54	114.60	125.25	110.87	74.78

March 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 107.16 + 37.95 – 43.58
= 101.54

The cash conversion cycle is a key metric that indicates how efficiently a company manages its working capital. Qorvo Inc's cash conversion cycle has shown fluctuations over the past five years. In March 2021, the cash conversion cycle was 74.78 days, indicating that the company took approximately 75 days to convert its invested cash back into cash inflows from sales.

However, there was a noticeable increase in the cash conversion cycle over the following years. By March 2023, the cycle had extended to 125.25 days, reflecting a decline in efficiency in managing working capital. This prolonged cycle suggests that Qorvo Inc took longer to transform its resources into cash receipts.

Subsequently, there was a slight improvement in the cash conversion cycle by March 2025, with the cycle standing at 101.54 days. Despite the improvement, Qorvo Inc still experienced a longer cash conversion period compared to the starting point in 2021.

Overall, the trend in Qorvo Inc's cash conversion cycle indicates a fluctuating efficiency in converting its investments in inventory and accounts receivable into cash inflows. The company may need to focus on optimizing its working capital management practices to shorten the cash conversion cycle and enhance liquidity.