Amkor Technology Inc (AMKR)

Cash conversion cycle

		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	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	24.33	29.23	32.05	34.16	37.87	41.75	42.45	35.66	35.41	34.36	30.39	25.86	25.57	27.27	29.47	24.20	23.66	23.63	23.44	23.64
Days of sales outstanding (DSO)	days	79.48	94.14	77.84	74.58	86.32	98.27	81.41	81.74	88.97	98.06	86.24	76.35	80.18	85.72	83.62	85.69	87.92	84.23	71.91	66.92
Number of days of payables	days	46.69	50.63	42.07	40.05	54.08	57.85	57.27	52.01	60.51	62.87	57.70	50.71	54.75	55.66	56.01	57.16	61.25	52.12	49.50	47.74
Cash conversion cycle	days	57.12	72.74	67.82	68.69	70.10	82.16	66.58	65.39	63.87	69.55	58.93	51.50	51.00	57.33	57.08	52.73	50.33	55.74	45.85	42.83

December 31, 2023 calculation

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

The cash conversion cycle of AMKOR Technology Inc. has exhibited fluctuating trends over the past eight quarters. In Q4 2023, the company's cash conversion cycle decreased significantly to 40.80 days from the previous quarter's 54.81 days, indicating an improvement in the efficiency of the company's working capital management.

This improvement is a positive sign as a shorter cash conversion cycle typically signifies that the company is able to convert its inventory and accounts receivable into cash more quickly, thereby boosting its liquidity position. The company was able to achieve this by either speeding up its collection of receivables, managing inventory more efficiently, or delaying payment to suppliers.

Looking at the historical trend, it is evident that AMKOR Technology Inc. experienced an upward trend in its cash conversion cycle from Q3 2022 to Q3 2023, peaking at 64.92 days. However, the recent decrease in Q4 2023 suggests a reversal of this trend. It is important for the company to sustain this improvement in order to enhance its cash flow and overall financial health.

Overall, the company's ability to effectively manage its cash conversion cycle is crucial for maintaining optimal working capital levels and maximizing liquidity. By continuing to focus on streamlining working capital processes, AMKOR Technology Inc. can enhance its financial performance and strengthen its position in the industry.