Alpha and Omega Semiconductor Ltd (AOSL)

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	0.13	147.21	136.00	113.33	124.50
Days of sales outstanding (DSO)	days	0.02	8.86	11.84	30.83	19.89
Number of days of payables	days	0.04	33.90	37.68	62.66	65.11
Cash conversion cycle	days	0.11	122.16	110.16	81.50	79.27

June 30, 2025 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 0.13 + 0.02 – 0.04
= 0.11

The cash conversion cycle (CCC) of Alpha and Omega Semiconductor Ltd exhibits a general upward trend over the analyzed period from June 30, 2021, to June 30, 2025. Specifically, the CCC increased from approximately 79.27 days in 2021 to 81.50 days in 2022, reflecting a modest extension of around 2.23 days. This upward movement continues more significantly through 2023 and 2024, with the cycle advancing to approximately 110.16 days in 2023 and further elongating to around 122.16 days in 2024. The substantial increase indicates that the company has experienced a lengthening of either its receivables collection period, inventory holding period, or both, resulting in a longer duration to convert investments in inventory and receivables back into cash.

The recent data point for June 30, 2025, shows a drastic reduction to approximately 0.11 days, which is an anomaly relative to prior figures. Such a sharp decrease suggests an abrupt change in operational or accounting practices, possibly reflecting extraordinary circumstances, data inaccuracies, or extraordinary efficiencies introduced by the company within that period.

Overall, the trend from 2021 to 2024 points to a prolonged cash conversion cycle, which can indicate increased working capital requirements, potential inefficiencies in inventory management or receivables collection, or strategic operational changes. The sudden near-elimination of the cycle in 2025 warrants further investigation to understand the underlying factors driving this reversal.