FormFactor Inc (FORM)
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 | 81.37 | 87.33 | 99.90 | 98.18 | 100.77 | 95.85 | 100.92 | 95.07 | 101.23 | 109.85 | 120.07 | 104.20 | 91.10 | 93.18 | 92.31 | 90.52 | 89.28 | 88.42 | 85.56 | 78.84 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 81.37 | 87.33 | 99.90 | 98.18 | 100.77 | 95.85 | 100.92 | 95.07 | 101.23 | 109.85 | 120.07 | 104.20 | 91.10 | 93.18 | 92.31 | 90.52 | 89.28 | 88.42 | 85.56 | 78.84 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 81.37 + — – —
= 81.37
FormFactor Inc's cash conversion cycle has shown fluctuations over the periods provided. The cash conversion cycle measures how efficiently a company manages its working capital, consisting of the days inventory outstanding, days sales outstanding, and days payable outstanding.
From March 31, 2020, to December 31, 2024, the cash conversion cycle for FormFactor Inc ranged between 78.84 days to 120.07 days. Generally, a longer cash conversion cycle indicates a longer period for the company to convert its investment in inventory back into cash received from customers.
The trend for FormFactor Inc's cash conversion cycle shows a peak around mid-2022 at 120.07 days, indicating a potential strain on the company's working capital management during that period. However, there is a subsequent improvement in efficiency, as seen in the decline to 81.37 days by the end of December 31, 2024.
The company should focus on managing its inventory levels efficiently, collecting receivables promptly, and extending payables strategically to optimize its cash conversion cycle. A shorter cash conversion cycle signifies improved liquidity and operational efficiency, highlighting the company's ability to effectively manage its working capital and generate cash flow.
Peer comparison
Dec 31, 2024