Diodes Incorporated (DIOD)

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	109.97	88.53	89.29	110.26	86.16
Days of sales outstanding (DSO)	days	82.14	67.45	72.88	96.74	75.30
Number of days of payables	days	44.65	39.42	56.67	60.34	44.51
Cash conversion cycle	days	147.45	116.56	105.50	146.65	116.95

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 109.97 + 82.14 – 44.65
= 147.45

The cash conversion cycle of Diodes, Inc. has varied over the past five years, indicating fluctuations in the company's efficiency in managing its cash flow and working capital.

In 2023, the cash conversion cycle increased to 165.90 days from 129.53 days in 2022, suggesting a longer time taken by Diodes, Inc. to convert its investments in inventory and accounts receivable into cash. This may indicate potential challenges in efficiently managing its working capital or delays in collecting payments from customers.

Comparing to the previous years, the cash conversion cycle was relatively lower in 2021 at 113.45 days, which could imply better management of inventory and faster collection of receivables during that period. However, in 2020 and 2019, the cycle was higher at 158.62 days and 129.34 days respectively, indicating challenges in working capital management in those years.

Overall, the trend in Diodes, Inc.'s cash conversion cycle shows some fluctuations over the years, suggesting the company's varying efficiency in managing its working capital, inventory, and receivables. Further analysis of the underlying factors contributing to these fluctuations would provide more insights into the company's financial health and operational efficiency.