Silicon Laboratories Inc (SLAB)

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	220.47	161.48	133.36	122.67	96.06	89.09	81.03	65.92	60.91	78.03	73.82	124.13	69.15	168.64	145.92	120.16	137.76	79.90	81.25	76.13
Days of sales outstanding (DSO)	days	13.67	39.13	35.20	—	25.46	—	—	—	49.78	—	—	—	—	—	—	—	—	—	—	—
Number of days of payables	days	65.24	46.34	50.50	65.77	85.96	82.27	104.39	76.45	58.46	76.53	100.02	108.08	79.39	117.83	83.87	74.30	73.35	43.30	45.75	44.87
Cash conversion cycle	days	168.89	154.28	118.07	56.90	35.56	6.82	-23.36	-10.54	52.23	1.50	-26.20	16.05	-10.24	50.80	62.05	45.86	64.41	36.60	35.51	31.26

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 220.47 + 13.67 – 65.24
= 168.89

Based on the data provided for Silicon Laboratories Inc., the cash conversion cycle fluctuated over the past years. The cash conversion cycle indicates the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

In the recent period, the cash conversion cycle has been somewhat stable, averaging around 100 days. The trend seems to show an improvement from the positive cycle seen in earlier periods to a more efficient negative cycle, indicating that the company has been managing its liquidity and working capital more effectively.

It is worth noting that a negative cash conversion cycle implies that the company is able to receive cash from its sales before paying its own suppliers, which can be a sign of strong bargaining power with suppliers or effective inventory management. Conversely, a positive cash conversion cycle may suggest inefficiencies in operations that could be further optimized to enhance the company's financial performance.

Overall, thorough analysis of the components of the cash conversion cycle, such as inventory turnover, accounts receivable collection period, and accounts payable payment period, would provide deeper insights into Silicon Laboratories Inc.'s working capital management and operational efficiency.