Enphase Energy Inc (ENPH)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Days of inventory on hand (DOH)	days	85.89	86.18	84.66	77.38	63.26	42.64	38.66	36.84	40.29	44.86	45.89	38.55	32.81	33.11	23.22	26.39	35.58	32.80	25.32	27.40
Days of sales outstanding (DSO)	days	61.39	67.80	71.30	72.75	71.06	75.38	67.91	72.02	69.04	66.47	65.70	85.95	88.11	80.74	96.71	98.98	85.86	62.08	45.30	47.76
Number of days of payables	days	46.86	60.99	38.30	26.71	34.40	22.07	18.41	25.98	33.66	28.43	31.85	41.87	50.17	46.67	50.52	61.69	61.86	42.07	19.60	27.34
Cash conversion cycle	days	100.41	92.98	117.66	123.42	99.91	95.95	88.17	82.89	75.67	82.89	79.75	82.63	70.75	67.17	69.41	63.68	59.58	52.80	51.03	47.82

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 been fluctuating over the years based on the provided data. It measures the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.

From March 31, 2020, to December 31, 2024, the cash conversion cycle increased initially, reaching its peak at 123.42 days by March 31, 2024, before starting to decline again. This trend indicates that Enphase Energy Inc may have experienced challenges in managing its working capital efficiently, which resulted in a longer period to convert its investments into cash.

The company should closely monitor its inventory management, accounts receivable collection, and accounts payable payment processes to optimize its cash conversion cycle. A shorter cash conversion cycle indicates better liquidity and more efficient use of resources, ultimately leading to improved financial performance.