Enphase Energy Inc (ENPH)

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	85.89	63.26	40.29	32.81	35.58
Days of sales outstanding (DSO)	days	61.39	71.06	69.04	88.11	85.86
Number of days of payables	days	46.86	34.40	33.66	50.17	61.86
Cash conversion cycle	days	100.41	99.91	75.67	70.75	59.58

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 85.89 + 61.39 – 46.86
= 100.41

The cash conversion cycle of Enphase Energy Inc has shown an upward trend over the years, increasing from 59.58 days as of December 31, 2020, to 100.41 days as of December 31, 2024. This indicates that the company has been taking longer to convert its investments in inventory and accounts receivable into cash. A longer cash conversion cycle may imply potential liquidity challenges or inefficiencies in managing working capital. Enphase Energy Inc should focus on optimizing its inventory management and accounts receivable collection processes to potentially shorten the cash conversion cycle and improve its overall financial performance.