Rambus Inc (RMBS)

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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	127.60	112.12	105.82	81.77	70.91	56.22	40.44	29.82	43.98	44.64	46.69	58.23	86.92	83.87	71.26	64.12	71.66	58.64	62.21	56.65
Days of sales outstanding (DSO)	days	105.91	102.36	123.55	124.26	145.32	155.38	195.19	187.10	199.76	226.21	244.08	252.62	247.04	258.56	280.12	322.41	366.29	344.94	325.66	348.01
Number of days of payables	days	63.79	50.79	55.69	56.59	84.19	81.01	88.36	75.19	58.48	73.33	52.04	45.77	54.03	78.59	86.44	102.41	67.84	56.11	51.99	57.22
Cash conversion cycle	days	169.72	163.68	173.68	149.45	132.03	130.59	147.27	141.73	185.25	197.52	238.73	265.08	279.92	263.84	264.93	284.11	370.10	347.46	335.88	347.44

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 127.60 + 105.91 – 63.79
= 169.72

The cash conversion cycle of Rambus Inc. has shown some variability over the past eight quarters. In Q4 2023, the company's cash conversion cycle was 179.32 days, which increased from the previous quarter Q3 2023 at 172.40 days. This suggests that it took Rambus Inc. longer to convert its investments in inventory and receivables into cash in Q4 2023 than in the previous quarter.

Looking at the trend over the past two years, we see that the cash conversion cycle has generally been increasing, indicating potential inefficiencies in managing inventory and collecting receivables. The highest point in the cycle was in Q2 2023 at 180.73 days, while the lowest point was in Q4 2022 at 130.06 days.

The cash conversion cycle measures how long it takes for a company to convert its resources expended into cash inflows. A longer cycle may indicate liquidity issues, poor inventory management, or difficulties in collecting receivables. Rambus Inc. should focus on optimizing its inventory levels and enhancing its accounts receivable collection processes to shorten its cash conversion cycle, thereby improving its overall financial efficiency.