Silicon Laboratories Inc (SLAB)

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	141.66	212.95	244.68	258.33	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
Days of sales outstanding (DSO)	days	34.03	35.33	27.74	18.55	13.67	39.13	35.20	—	25.46	—	—	—	49.78	—	—	—	—	—	—	—
Number of days of payables	days	56.92	68.16	57.89	58.10	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
Cash conversion cycle	days	118.76	180.12	214.53	218.78	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

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 141.66 + 34.03 – 56.92
= 118.76

The cash conversion cycle of Silicon Laboratories Inc has exhibited significant fluctuations over the periods provided. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and accounts receivable into cash received from sales.

Looking at the data, the cash conversion cycle ranged from -26.20 days to 218.78 days, indicating fluctuations in the management of working capital during the periods under review. A negative cash conversion cycle suggests efficient management of working capital where the company can collect receivables and convert inventory into cash before having to pay its suppliers.

It is crucial to note that the negative values observed in some periods may result from the timing of cash flows and may not necessarily indicate optimal performance. Conversely, the significantly high positive values recorded in other periods may indicate inefficiencies in managing working capital, possibly due to slow collection of receivables or high inventory levels.

Overall, Silicon Laboratories Inc should aim to achieve a balanced cash conversion cycle to ensure efficient operations and maintain healthy liquidity levels. Regular monitoring and optimization of working capital management practices can help the company improve its cash conversion cycle and enhance its overall financial performance.