Semtech Corporation (SMTC)

Cash conversion cycle

Jan 31, 2025 Oct 31, 2024 Jul 31, 2024 Apr 30, 2024 Jan 31, 2024 Jan 28, 2024 Oct 31, 2023 Oct 29, 2023 Jul 31, 2023 Jul 30, 2023 Apr 30, 2023 Jan 31, 2023 Jan 29, 2023 Oct 31, 2022 Oct 30, 2022 Jul 31, 2022 May 1, 2022 Apr 30, 2022 Jan 31, 2022 Jan 30, 2022
Days of inventory on hand (DOH) days 132.47 137.33 71.87 68.59 62.26 59.75 64.49 62.72 78.44 68.83 149.10 152.78 151.91 112.44 109.75 119.00 106.88 121.95 115.29 114.94
Days of sales outstanding (DSO) days 70.89 66.35 74.67 87.98 37.25 34.68
Number of days of payables days 18.56 21.49 20.04 73.63 44.53 51.11
Cash conversion cycle days 132.47 137.33 71.87 68.59 62.26 112.07 64.49 107.59 78.44 123.45 149.10 152.78 166.26 112.44 102.46 119.00 106.88 121.95 115.29 98.50

January 31, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 132.47 + — – —
= 132.47

The cash conversion cycle of Semtech Corporation, a key indicator of the efficiency of its working capital management, has shown fluctuations over the past few years.

In January 2022, the cash conversion cycle was 98.50 days, indicating that the company took approximately 98.50 days to convert its investments in inventory and accounts receivables into cash. However, by April 2022, this figure increased to 121.95 days, suggesting that the company's liquidity and working capital management might have faced some challenges during that period.

There was a slight improvement by July 2022, with the cash conversion cycle decreasing to 119.00 days. This improvement was followed by a further decrease to 102.46 days in October 2022, indicating better efficiency in converting its assets into cash.

The cycle spiked in January 2023 to 166.26 days, indicating potential issues in managing working capital effectively. However, there was a significant improvement by July 2023, with the cycle reducing to 78.44 days, reflecting better liquidity management.

Subsequently, the cycle increased to 137.33 days by October 2024, possibly indicating challenges in managing working capital efficiently during that period. By January 2025, the cycle had decreased to 132.47 days, suggesting some improvements in working capital management.

Overall, Semtech Corporation has experienced fluctuations in its cash conversion cycle over the years, indicating varying efficiencies in managing its working capital, inventory, and accounts receivables. It would be essential for the company to continue monitoring and optimizing its cash conversion cycle to ensure effective working capital management and maintain healthy liquidity levels.