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.