Enphase Energy Inc (ENPH)

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 63.26 40.29 32.81 35.58 29.03
Days of sales outstanding (DSO) days 71.06 69.04 88.11 85.86 85.01
Number of days of payables days 34.40 33.66 50.17 61.86 52.04
Cash conversion cycle days 99.91 75.67 70.75 59.58 62.00

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 63.26 + 71.06 – 34.40
= 99.91

The cash conversion cycle of Enphase Energy Inc has shown variability over the past five years. In 2023, the cash conversion cycle increased to 99.91 days from 75.67 days in 2022, indicating that the company took longer to convert its investments in inventory and accounts receivable into cash during the year. This could imply potential challenges in managing working capital efficiently.

Comparing the latest figure to the data from 2021 and earlier, Enphase Energy Inc's cash conversion cycle has generally been increasing, with a noticeable rise from 59.58 days in 2020 to 70.75 days in 2021. The upward trend suggests a possible deterioration in the company's ability to collect receivables and manage inventory efficiently.

While the cash conversion cycle in 2023 is higher than in preceding years, it is vital for Enphase Energy Inc to monitor and address the factors contributing to this trend. A prolonged cash conversion cycle can tie up valuable resources and impact the company's liquidity and overall financial health. Management should focus on optimizing inventory management and improving accounts receivable collection processes to shorten the cash conversion cycle and enhance operational efficiency.


Peer comparison

Dec 31, 2023


See also:

Enphase Energy Inc Cash Conversion Cycle