Texas Instruments Incorporated (TXN)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	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
Days of inventory on hand (DOH)	days	252.38	241.24	229.16	227.53	224.56	221.60	214.55	190.19	160.83	142.54	133.26	126.60	116.81	114.94	117.02	126.74	137.44	150.80	156.68	142.60
Days of sales outstanding (DSO)	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Cash conversion cycle	days	252.38	241.24	229.16	227.53	224.56	221.60	214.55	190.19	160.83	142.54	133.26	126.60	116.81	114.94	117.02	126.74	137.44	150.80	156.68	142.60

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 252.38 + — – —
= 252.38

The cash conversion cycle of Texas Instruments Incorporated has shown fluctuations over the past few years. Starting from around 142.60 days as of March 31, 2020, the company's cash conversion cycle increased to a peak of 252.38 days by December 31, 2024. This indicates that the company has been taking longer to convert its investments in inventory back into cash.

The trend generally indicates a potential issue with inventory management or collections processes, as a longer cash conversion cycle suggests that the company is taking more time to collect receivables or is holding inventory for extended periods before selling it.

It is essential for Texas Instruments to analyze and address the factors contributing to the lengthening of its cash conversion cycle to ensure optimal utilization of its resources and improve overall efficiency in its operations. Additionally, the company may need to focus on streamlining its inventory turnover and accounts receivable collection processes to enhance its working capital management and maintain healthy liquidity levels.