Semtech Corporation (SMTC)

Cash conversion cycle

		Jan 28, 2024	Oct 29, 2023	Jul 30, 2023	Apr 30, 2023	Jan 29, 2023	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Jan 30, 2022	Oct 31, 2021	Aug 1, 2021	May 2, 2021	Jan 31, 2021	Oct 25, 2020	Jul 26, 2020	Apr 26, 2020	Jan 26, 2020	Oct 27, 2019	Jul 28, 2019	Apr 28, 2019
Days of inventory on hand (DOH)	days	39.62	52.49	62.17	113.81	126.04	89.09	84.04	85.25	93.04	86.04	87.32	82.90	79.71	71.15	72.65	71.64	67.88	71.29	72.16	69.71
Days of sales outstanding (DSO)	days	71.60	74.89	75.67	68.09	83.30	37.08	32.04	—	35.47	38.23	—	—	43.62	37.92	34.24	33.24	33.52	32.20	23.66	22.13
Number of days of payables	days	12.31	17.98	18.10	39.71	61.09	36.15	41.97	—	41.37	37.99	—	—	45.72	42.98	36.83	40.35	44.64	34.29	37.40	38.62
Cash conversion cycle	days	98.91	109.40	119.74	142.19	148.24	90.03	74.10	85.25	87.13	86.29	87.32	82.90	77.60	66.09	70.05	64.52	56.76	69.20	58.42	53.21

January 28, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 39.62 + 71.60 – 12.31
= 98.91

The cash conversion cycle of Semtech Corporation has shown fluctuations over the past several quarters. The company's ability to convert its resources into cash has varied, with the cycle ranging from 53.21 days to 148.24 days. A shorter cash conversion cycle indicates that the company takes less time to convert its investments in inventory and accounts receivable into cash from sales.

In the most recent quarter, the cash conversion cycle was 98.91 days, showing an improvement compared to the previous quarter's cycle of 109.40 days. Despite this improvement, the company's cycle remains relatively high, indicating that Semtech Corporation may have room for further optimization in managing its cash flow and working capital.

Overall, the trend in the cash conversion cycle suggests that Semtech Corporation has experienced some challenges in efficiently managing its cash flow and working capital in recent periods. Further analysis of the company's operations and financial management practices may be required to address these fluctuations and enhance its cash conversion efficiency.