Texas Instruments Incorporated (TXN)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	175.33	160.83	116.81	137.44	139.94
Days of sales outstanding (DSO)	days	37.25	34.54	33.85	35.69	27.26
Number of days of payables	days	35.16	49.64	34.92	29.17	27.14
Cash conversion cycle	days	177.42	145.72	115.74	143.95	140.06

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 175.33 + 37.25 – 35.16
= 177.42

The cash conversion cycle of Texas Instruments Inc. has shown fluctuations over the past five years. In 2023, the cash conversion cycle increased significantly to 216.76 days compared to 145.72 days in 2022. This suggests that the company took longer to convert its investments in inventory into cash receipts from customers.

In 2021, the cash conversion cycle improved to 110.72 days, indicating that Texas Instruments was able to more efficiently manage its working capital by reducing the time it takes to sell inventory and collect payments from customers. However, this improvement reversed in 2020 when the cycle increased to 143.95 days.

Looking back to 2019, the cash conversion cycle was at 140.06 days, indicating a modest improvement compared to 2020 but remained relatively stable over the two-year period.

Overall, fluctuations in the cash conversion cycle of Texas Instruments Inc. suggest varying levels of efficiency in managing working capital and converting investments into cash over the past five years. This metric can be further analyzed to understand the company's operational efficiency and liquidity management.