Sitime Corporation (SITM)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	386.43	209.08	108.70	77.42	97.66
Days of sales outstanding (DSO)	days	55.41	53.06	64.02	77.48	81.32
Number of days of payables	days	51.24	53.97	60.28	38.75	31.72
Cash conversion cycle	days	390.60	208.17	112.44	116.14	147.26

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 386.43 + 55.41 – 51.24
= 390.60

The cash conversion cycle of SiTime Corp has shown significant fluctuations over the past five years. In 2023, the company's cash conversion cycle was 390.60 days, reflecting an increase from the previous year. This indicates that it takes SiTime Corp longer to convert its investments in inventory and other resources into cash receipts from customers.

Comparing 2023 to 2022, there was a notable increase in the cash conversion cycle, which suggests potential issues with managing inventory, accounts receivable, and accounts payable. It is important for the company to focus on streamlining its operations and improving efficiency in order to reduce the cash conversion cycle and enhance its cash flow management.

Looking back further, there was a significant decrease in the cash conversion cycle from 2021 to 2022, indicating improved efficiency in working capital management during that period. However, the cycle increased from 2020 to 2021 before decreasing again in 2022.

Overall, SiTime Corp's cash conversion cycle has shown volatility in recent years, highlighting the need for the company to continuously monitor and evaluate its working capital management practices to optimize cash flow and improve financial performance.