Semtech Corporation (SMTC)

Cash conversion cycle

		Jan 28, 2024	Jan 29, 2023	Jan 30, 2022	Jan 31, 2021	Jan 26, 2020
Days of inventory on hand (DOH)	days	31.02	126.12	92.90	79.35	67.86
Days of sales outstanding (DSO)	days	71.67	83.32	35.47	43.62	41.99
Number of days of payables	days	9.64	61.13	41.31	45.52	44.62
Cash conversion cycle	days	93.05	148.31	87.05	77.45	65.23

January 28, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 31.02 + 71.67 – 9.64
= 93.05

The cash conversion cycle for Semtech Corporation has fluctuated over the past five years. In January 2020, the company had a relatively short cash conversion cycle of 65.23 days, indicating efficient management of working capital. However, this metric increased significantly to 77.45 days in January 2021, suggesting a slower turnover of cash.

In the following years, the cash conversion cycle continued to fluctuate, with a notable increase to 148.31 days in January 2023, reflecting potential challenges in managing working capital and converting sales into cash. Despite this, the company managed to improve its cash conversion cycle to 93.05 days in January 2024, signaling a more efficient utilization of resources and quicker cash cycle.

Overall, Semtech Corporation's cash conversion cycle analysis reveals fluctuations in working capital management efficiency over the years, highlighting the importance of monitoring and optimizing this metric for operational and financial performance.