Sanmina Corporation (SANM)

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	63.79	84.57	61.03	48.86	43.01
Days of sales outstanding (DSO)	days	—	—	—	—	—
Number of days of payables	days	69.64	102.52	85.81	68.64	63.85
Cash conversion cycle	days	-5.86	-17.94	-24.78	-19.78	-20.84

September 30, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 63.79 + — – 69.64
= -5.86

The cash conversion cycle (CCC) of Sanmina Corp has shown a notable increase from 29.18 days in September 2019 to 44.24 days in September 2023. This suggests that the company has taken longer to convert its investments in inventory and receivables into cash. An increasing CCC can indicate potential inefficiencies in the company's working capital management, particularly in managing inventory levels and collecting receivables. It's important for Sanmina Corp to closely monitor and address this trend to ensure optimal cash flow and operational efficiency.