Ichor Holdings Ltd (ICHR)
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 | 122.42 | 126.81 | 96.93 | 93.74 | 62.31 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 122.42 | 126.81 | 96.93 | 93.74 | 62.31 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 122.42 + — – —
= 122.42
The cash conversion cycle of Ichor Holdings Ltd has been increasing over the years, indicating a prolonged period between the company's cash outflows and cash inflows from its operations.
In 2020, the cash conversion cycle stood at 62.31 days, suggesting that the company was relatively efficient in managing its working capital. However, there was a notable increase in 2021 to 93.74 days, signifying a slower conversion of inventory and receivables into cash.
This trend continued into 2022 and 2023, with the cash conversion cycle extending to 96.93 days and 126.81 days, respectively. This prolonged cycle could imply difficulties in collecting receivables and managing inventory effectively, potentially leading to cash flow constraints.
Although there was a slight improvement in 2024, with the cash conversion cycle decreasing to 122.42 days, it still remains significantly higher compared to the initial year under review. It is essential for Ichor Holdings Ltd to closely monitor and manage its working capital components to enhance operational efficiency and optimize cash flow generation in the future.
Peer comparison
Dec 31, 2024