Advanced Micro Devices Inc (AMD)

Cash conversion cycle

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Days of inventory on hand (DOH)	days	109.24	88.11	70.56	68.88	75.95
Days of sales outstanding (DSO)	days	95.86	103.33	80.65	67.54	82.51
Number of days of payables	days	37.91	41.61	46.64	46.54	25.41
Cash conversion cycle	days	167.20	149.83	104.57	89.88	133.05

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 109.24 + 95.86 – 37.91
= 167.20

The cash conversion cycle of Advanced Micro Devices Inc has fluctuated over the years based on the provided data. It decreased from 133.05 days in December 2020 to 89.88 days in December 2021, indicating an improvement in the company's efficiency in managing its cash flow from operations, inventory, and accounts receivable.

However, by December 2022, the cash conversion cycle slightly increased to 104.57 days before experiencing a significant jump to 149.83 days in December 2023 and further to 167.20 days by December 2024. These increases suggest that the company may be taking longer to convert its investments in inventory and receivables into cash.

Overall, the cash conversion cycle trend of Advanced Micro Devices Inc shows a mixed performance, highlighting the importance for the company to closely monitor and manage its working capital components to ensure optimal cash flow efficiency.