Viavi Solutions Inc (VIAV)

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	82.97	86.62	96.71	93.01	90.68	94.96	86.83	78.77	77.45	81.09	82.60	74.89	71.49	70.58	70.52	69.14	64.55	66.27	69.66	74.62
Days of sales outstanding (DSO)	days	89.35	88.22	86.73	77.80	87.08	—	76.25	—	80.72	—	—	—	—	—	—	—	—	—	—	—
Number of days of payables	days	43.34	35.60	36.80	32.62	36.87	32.96	36.23	44.16	41.01	41.50	49.10	48.74	47.61	42.69	42.78	35.80	41.07	34.43	37.07	45.72
Cash conversion cycle	days	128.99	139.24	146.64	138.20	140.90	62.00	126.85	34.61	117.15	39.58	33.50	26.15	23.88	27.89	27.74	33.34	23.48	31.84	32.60	28.90

June 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 82.97 + 89.35 – 43.34
= 128.99

The cash conversion cycle of Viavi Solutions Inc has exhibited fluctuations over the past several quarters. It measures the time it takes for a company to convert its investment in inventory and other resources into cash flows from sales. A shorter cash conversion cycle indicates efficient management of working capital.

In the most recent quarter ending June 30, 2024, the cash conversion cycle was 128.99 days, showing an improvement compared to the previous quarters. This suggests that the company was able to manage its inventory, accounts receivable, and accounts payable more effectively during this period.

On the other hand, the cash conversion cycle was at its highest at 146.64 days in the quarter ending December 31, 2023, indicating a longer time taken to convert investments into cash flows. This could be a signal of inefficiencies in managing working capital during that particular period.

It is essential for Viavi Solutions Inc to continuously monitor and optimize its cash conversion cycle to ensure efficient utilization of resources and maintain healthy cash flow operations. Any improvements in managing inventory levels, collecting accounts receivable promptly, and optimizing payment terms with suppliers can contribute to a shorter cash conversion cycle, which is beneficial for the company's financial health.