Sitime Corporation (SITM)

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
Days of inventory on hand (DOH)	days	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
Days of sales outstanding (DSO)	days	55.41	56.59	28.78	31.13	53.06	54.90	49.00	44.13	64.02	64.64	66.05	65.13	77.48	63.06
Number of days of payables	days	51.24	67.85	46.59	32.86	53.97	59.71	81.59	52.09	60.27	63.19	52.26	52.13	38.75	50.83
Cash conversion cycle	days	390.60	344.18	288.86	239.17	208.17	158.91	97.17	120.11	112.44	97.10	111.10	99.54	116.14	115.67

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 been fluctuating over the past eight quarters. In Q4 2023, the company's cash conversion cycle was 390.60 days, higher than in the previous quarter. This indicates that SiTime Corp took longer to convert its investment in inventory and accounts receivable into cash during this period.

In the previous quarters, there was a decreasing trend in the cash conversion cycle, with notable improvements observed in Q3, Q2, and Q1 of 2023, showing that the company was able to manage its working capital more efficiently. However, in Q4 2022, there was a significant increase in the cash conversion cycle compared to Q3 2022.

Overall, SiTime Corp should aim to maintain a lower cash conversion cycle to optimize its working capital management and improve its liquidity position. This will help the company ensure smoother operations and better cash flow sustainability in the long term.