Kulicke and Soffa Industries Inc (KLIC)

Cash conversion cycle

		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	Dec 31, 2019
Days of inventory on hand (DOH)	days	148.29	142.30	145.06	222.76	206.64	193.09	159.95	127.64	89.39	91.83	85.66	78.94	74.42	85.38	100.61	114.82	125.49	134.11	130.01	125.46
Days of sales outstanding (DSO)	days	100.22	100.54	96.55	91.27	77.97	87.49	—	59.99	75.09	—	—	—	101.30	—	—	—	—	—	—	—
Number of days of payables	days	49.10	42.27	41.37	55.26	46.88	44.76	39.14	34.67	32.53	42.05	40.51	59.54	68.78	80.34	89.00	82.03	64.75	58.32	61.87	59.17
Cash conversion cycle	days	199.41	200.57	200.24	258.77	237.72	235.81	120.81	152.96	131.95	49.78	45.14	19.40	106.94	5.04	11.62	32.79	60.74	75.79	68.14	66.29

September 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 148.29 + 100.22 – 49.10
= 199.41

The cash conversion cycle of Kulicke and Soffa Industries Inc has varied over the historical periods analyzed. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

From Dec 2019 to Mar 2020, the company had a relatively stable cash conversion cycle around the 60-70 day range. However, there was a significant decrease in the cycle to 5.04 days in Jun 2020, indicating a more efficient management of cash and working capital.

From Sep 2020 to Dec 2021, there were fluctuations in the cash conversion cycle, with a peak of 106.94 days in Sep 2021. This suggests potential challenges in managing inventory, accounts receivable, and accounts payable during this period.

In the recent quarters from Mar 2022 to Sep 2024, the cash conversion cycle increased significantly, reaching over 200 days. This prolonged cycle could indicate inefficiencies in the company's working capital management, potentially leading to increased financing costs and reduced liquidity.

Overall, Kulicke and Soffa Industries Inc's cash conversion cycle analysis highlights fluctuations in the efficiency of its working capital management over time, posing challenges in optimizing cash flows from operations. Further assessment and strategic adjustments may be necessary to improve the company's liquidity position and operational efficiency.