First Solar Inc (FSLR)

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	168.54	148.30	88.96	110.88	102.02
Days of sales outstanding (DSO)	days	146.36	147.64	45.20	53.62	39.41
Number of days of payables	days	74.94	37.47	48.88	32.18	32.96
Cash conversion cycle	days	239.95	258.47	85.28	132.32	108.48

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 168.54 + 146.36 – 74.94
= 239.95

The cash conversion cycle of First Solar Inc has shown significant fluctuations over the years.

As of December 31, 2020, the cash conversion cycle stood at 108.48 days, indicating that the company took approximately 108 days to convert its investments in inventory and accounts receivable into cash.

By December 31, 2021, the cash conversion cycle had increased to 132.32 days, suggesting a longer period to convert investments into cash compared to the previous year.

In 2022, the cycle decreased to 85.28 days, reflecting a more efficient management of cash flow and working capital.

However, there was a notable spike in the cash conversion cycle by December 31, 2023, reaching 258.47 days. This substantial increase may raise concerns about the company's liquidity and operational efficiency.

By the end of 2024, the cycle decreased slightly to 239.95 days, but still remained at a relatively high level compared to the previous years.

Overall, the fluctuating trend in the cash conversion cycle of First Solar Inc indicates varying levels of efficiency in managing cash flow, inventory, and accounts receivable over the specified timeframe. Further analysis of the underlying factors contributing to these fluctuations would be beneficial to assess the company's operational and financial performance.