Sitime Corporation (SITM)

Cash conversion cycle

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Days of inventory on hand (DOH) days 285.23 309.96 358.76 438.11 386.43 355.44 306.68 240.90 209.08 163.72 129.76 128.08 108.70 95.64 97.32 86.54 77.42 103.44 105.63 105.35
Days of sales outstanding (DSO) days — — — — — — — — — — — — — — — — — — — —
Number of days of payables days — — — — — — — — — — — — — — — — — — — —
Cash conversion cycle days 285.23 309.96 358.76 438.11 386.43 355.44 306.68 240.90 209.08 163.72 129.76 128.08 108.70 95.64 97.32 86.54 77.42 103.44 105.63 105.35

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 285.23 + — – —
= 285.23

Sitime Corporation's cash conversion cycle has shown fluctuations over the past few years. From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from 77.42 days to 438.11 days, indicating significant variability in the company's efficiency in converting its resources into cash.

During the initial period, the cash conversion cycle remained relatively stable, hovering around 100 days. However, from March 31, 2023, onwards, there was a notable increase in the cycle, peaking at 438.11 days on March 31, 2024, before decreasing to 285.23 days by the end of December 2024.

The increasing trend in the cash conversion cycle from 2023 to the first half of 2024 suggests potential challenges in managing the company's working capital efficiently. A prolonged cash conversion cycle may indicate delays in collecting receivables, managing inventory, or paying suppliers promptly, which can impact the company's liquidity and profitability.

It is essential for Sitime Corporation to closely monitor and address the factors contributing to the prolonged cash conversion cycle to ensure the optimal management of its cash flow and working capital requirements. Regularly evaluating and improving the processes related to accounts receivable, inventory turnover, and accounts payable can help the company enhance its cash conversion efficiency and maintain a healthy financial position.