First Solar Inc (FSLR)

Cash conversion cycle

		Dec 31, 2024	Sep 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	Dec 31, 2019
Days of inventory on hand (DOH)	days	158.74	231.49	174.58	148.30	139.90	111.01	104.28	88.96	130.43	139.57	158.97	110.88	119.23	102.02	90.99	102.02	78.29	78.13	72.25	64.39
Days of sales outstanding (DSO)	days	141.38	79.25	89.73	147.64	89.49	83.32	38.92	45.20	47.06	66.91	43.05	53.62	34.53	71.67	96.69	39.41	30.94	39.07	46.12	78.76
Number of days of payables	days	70.59	49.11	43.02	37.47	17.56	36.09	39.66	48.88	30.29	27.72	27.65	32.18	31.31	25.09	30.77	32.96	21.22	23.94	26.17	31.66
Cash conversion cycle	days	229.53	261.63	221.30	258.47	211.83	158.25	103.54	85.28	147.20	178.76	174.37	132.32	122.45	148.59	156.91	108.48	88.00	93.26	92.20	111.49

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 158.74 + 141.38 – 70.59
= 229.53

The cash conversion cycle (CCC) of First Solar Inc has shown fluctuations over the period from December 31, 2019, to December 31, 2024. The CCC indicates how long it takes for the company to convert its investments in inventory and other resources into cash flows from sales.

From December 31, 2019, to March 31, 2020, there was an improvement in the CCC, as it decreased from 111.49 days to 92.20 days. This trend continued until September 30, 2020, with the CCC reaching 88.00 days. However, by December 31, 2020, the CCC increased to 108.48 days.

The CCC then spiked significantly by March 31, 2021, to 156.91 days, indicating a potential issue with managing inventory and collecting receivables efficiently. This trend continued until June 30, 2022, with the CCC staying above 140 days.

From September 30, 2022, to March 31, 2023, there was some improvement in the CCC, but it remained relatively high at 158.25 days by June 30, 2023. The CCC increased drastically by September 30, 2023, to 211.83 days and continued to rise to 258.47 days by December 31, 2023.

Although there was a slight improvement in the CCC by March 31, 2024, the level remained high at 221.30 days. The CCC increased further by September 30, 2024, reaching 261.63 days before decreasing slightly to 229.53 days by December 31, 2024.

Overall, the CCC trend of First Solar Inc suggests challenges in managing working capital efficiently, particularly regarding inventory turnover and receivables collection. The company may need to focus on streamlining its operations to improve its cash conversion cycle and enhance overall liquidity management.