Diodes Incorporated (DIOD)

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	198.06	141.76	112.08	112.13	140.43
Days of sales outstanding (DSO)	days	—	—	—	—	—
Number of days of payables	days	—	—	—	—	—
Cash conversion cycle	days	198.06	141.76	112.08	112.13	140.43

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 198.06 + — – —
= 198.06

The cash conversion cycle for Diodes Incorporated has shown some fluctuations over the past five years. As of December 31, 2020, the company's cash conversion cycle was 140.43 days, indicating that it takes approximately 140 days to convert its investment in inventory to cash received from sales.

By the end of December 31, 2021 and December 31, 2022, the cash conversion cycle improved to 112.13 days and 112.08 days, respectively. This reduction suggests that Diodes Incorporated streamlined its operating cycle, which includes inventory management, accounts receivable collection, and accounts payable payment processes, leading to quicker conversion of inventory into cash.

However, the cash conversion cycle increased to 141.76 days by December 31, 2023, which is higher than the cycle recorded in 2020. This may indicate a slowdown in the company's ability to convert its resources into cash efficiently.

By the end of December 31, 2024, the cash conversion cycle significantly extended to 198.06 days, which is the highest in the period analyzed. This prolonged cycle may raise concerns about the company's working capital management, potentially affecting its liquidity and operational efficiency.

Overall, while Diodes Incorporated has experienced fluctuations in its cash conversion cycle over the years, it is essential for the company to closely monitor and manage its working capital to ensure optimal cash flow and operational performance.