Viavi Solutions Inc (VIAV)

Cash conversion cycle

		Jun 30, 2025	Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021
Days of inventory on hand (DOH)	days	91.95	82.97	90.68	77.45	71.49
Days of sales outstanding (DSO)	days	87.86	89.35	76.29	73.68	78.09
Number of days of payables	days	53.66	43.34	36.87	41.01	47.61
Cash conversion cycle	days	126.15	128.99	130.11	110.12	101.97

June 30, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 91.95 + 87.86 – 53.66
= 126.15

The cash conversion cycle (CCC) of Viavi Solutions Inc. demonstrates a trend characterized by an overall increase over the observed period from June 30, 2021, to June 30, 2025. Specifically, the CCC was 101.97 days as of June 30, 2021, reflecting the number of days it takes for the company to convert its investments in inventory and receivables into cash, offset by its payables period.

By June 30, 2022, the CCC extended to 110.12 days, indicating that the company was taking longer to complete this cycle, which could be attributable to changes in receivables collection periods, inventory turnover, or payables deferral. The upward trend continued into June 30, 2023, reaching 130.11 days, marking a significant elongation in the cycle. This suggests a potential slowdown in cash inflows relative to outflows or a strategic shift in credit and inventory management that extended the time needed to convert operations into liquid assets.

Although marginally reduced, the CCC slightly declined to 128.99 days by June 30, 2024, and further to 126.15 days by June 30, 2025. While these reductions could indicate some improvement in operational efficiencies, the overall level remains substantially higher than the 2021 figure.

In summary, over the four-year period, Viavi Solutions Inc. experienced a notable expansion in its cash conversion cycle, implying a lengthening of the period it takes for the company to turn its investments into cash. This trend might reflect changes in the company's operational practices, customer credit policies, or inventory management. The relatively persistent elongation warrants ongoing monitoring, as a prolonged CCC can impact liquidity and working capital management.