Amkor Technology Inc (AMKR)

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	24.33	37.87	33.88	24.24	23.66
Days of sales outstanding (DSO)	days	79.48	86.32	88.97	81.30	87.92
Number of days of payables	days	46.69	54.08	57.89	51.88	61.25
Cash conversion cycle	days	57.12	70.10	64.96	53.65	50.33

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 24.33 + 79.48 – 46.69
= 57.12

AMKOR Technology Inc.'s cash conversion cycle has shown some fluctuation over the past five years, ranging from 39.04 days in 2019 to 53.20 days in 2022. It measures the average number of days it takes for the company to convert its investments in inventory and other resources into cash flows from sales. A shorter cash conversion cycle is generally favorable as it indicates that the company is able to efficiently manage its working capital and generate cash quickly. On the other hand, a longer cash conversion cycle may indicate inefficiencies in inventory management or slower collection of receivables.

In 2023, AMKOR Technology Inc. saw an improvement in its cash conversion cycle, reducing it to 40.80 days compared to the previous year. This may suggest that the company has made improvements in managing its inventory levels or speeding up its collection of receivables. However, it is essential to monitor this metric over time to ensure that the trend continues positively, as a lower cash conversion cycle can enhance the company's liquidity and overall financial performance.