Sonos Inc (SONO)
Cash conversion cycle
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 66.68 | 91.39 | 117.71 | 50.61 | 55.97 |
| Days of sales outstanding (DSO) | days | 10.68 | 14.84 | 21.22 | 21.43 | 15.14 |
| Number of days of payables | days | 56.05 | 49.57 | 87.00 | 58.77 | 77.47 |
| Cash conversion cycle | days | 21.31 | 56.65 | 51.93 | 13.27 | -6.37 |
September 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 66.68 + 10.68 – 56.05
= 21.31
The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle indicates more efficient management of working capital.
Sonos Inc's cash conversion cycle has fluctuated over the past five years. In 2024, the cash conversion cycle was 21.31 days, a significant improvement from 56.65 days in 2023 and 51.93 days in 2022. This suggests that Sonos was able to manage its working capital more effectively in 2024.
In 2021, the cash conversion cycle was 13.27 days, indicating a relatively efficient working capital management compared to previous years. Interestingly, in 2020, the cash conversion cycle was negative at -6.37 days, which implies that Sonos was able to convert its investments into cash before having to pay its suppliers, highlighting a strong cash position and efficient operations in that year.
Overall, Sonos Inc has shown varying levels of efficiency in managing its working capital over the past five years, with improvements seen in 2024 and 2021. Monitoring the cash conversion cycle can provide insights into the company's operational efficiency and financial management practices.
Peer comparison
Sep 30, 2024