Sonos Inc (SONO)
Cash conversion cycle
| Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 44.18 | 50.55 | 47.35 | 91.05 | 76.06 | 84.75 | 77.13 | 117.71 | 87.30 | 68.55 | 55.59 | 50.71 | 40.86 | 39.85 | 26.98 | 55.97 | 27.71 | 36.62 | 36.37 | 74.01 |
| Days of sales outstanding (DSO) | days | 30.49 | 16.41 | 18.41 | 14.75 | 24.86 | — | 22.52 | 21.08 | — | — | — | 21.43 | — | — | — | — | — | — | — | — |
| Number of days of payables | days | 51.14 | 34.21 | 48.26 | 49.40 | 37.99 | 47.70 | 59.48 | 87.00 | 80.10 | 70.26 | 92.48 | 58.89 | 55.29 | 58.12 | 73.35 | 77.48 | 33.38 | 26.74 | 61.52 | 84.84 |
| Cash conversion cycle | days | 23.53 | 32.75 | 17.50 | 56.41 | 62.93 | 37.05 | 40.17 | 51.79 | 7.20 | -1.71 | -36.90 | 13.25 | -14.43 | -18.27 | -46.37 | -21.51 | -5.66 | 9.89 | -25.16 | -10.83 |
June 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 44.18 + 30.49 – 51.14
= 23.53
The cash conversion cycle of Sonos Inc has exhibited fluctuations over the past few quarters. The cycle represents the time it takes for the company to convert its investments in inventory back into cash received from customers.
Analyzing the data, we can see that Sonos Inc has experienced periods of inefficiency in managing its working capital with longer cash conversion cycles, such as in March and June 2023, and September 2023. These longer cycles may be indicative of challenges in efficiently managing inventory levels, collecting receivables, or paying suppliers.
Conversely, the company has also achieved efficient working capital management, as indicated by negative cash conversion cycles in March 2022 and September 2022. Negative cycles suggest that Sonos Inc is able to collect cash from customers before paying suppliers, leading to a favorable position in terms of cash flow and liquidity.
It is important for Sonos Inc to focus on optimizing its cash conversion cycle by maintaining optimal inventory levels, improving accounts receivable collection processes, and negotiating favorable payment terms with suppliers. By doing so, the company can enhance its working capital efficiency and overall financial performance.
Peer comparison
Jun 30, 2024