Monolithic Power Systems Inc (MPWR)

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	155.30	175.07	218.97	181.28	151.46
Days of sales outstanding (DSO)	days	38.45	46.07	38.95	33.31	29.72
Number of days of payables	days	37.94	28.73	30.09	58.02	36.81
Cash conversion cycle	days	155.80	192.42	227.83	156.57	144.37

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 155.30 + 38.45 – 37.94
= 155.80

Monolithic Power Systems Inc's cash conversion cycle has shown fluctuations over the years. In 2020, the company had a cash conversion cycle of 144.37 days, which increased to 156.57 days in 2021. Subsequently, the cycle significantly extended to 227.83 days by the end of 2022, indicating a slower conversion of inventory and receivables into cash. However, by 2023, the cash conversion cycle decreased to 192.42 days, showing some improvement. In the most recent period ending December 31, 2024, the cycle reduced to 155.80 days, suggesting a more efficient management of the company's working capital. Overall, while there have been fluctuations, the company's efforts to manage its operating cycle and cash flow conversion have demonstrated varying degrees of success over the years.