Universal Display (OLED)
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 | 449.76 | 473.98 | 522.89 | 425.85 | 391.10 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 449.76 | 473.98 | 522.89 | 425.85 | 391.10 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 449.76 + — – —
= 449.76
The cash conversion cycle of Universal Display indicates the number of days it takes for the company to convert its investments in inventory and other resources into cash. Analyzing the data provided, we observe an upward trend in the cash conversion cycle over the years.
In December 2020, the cash conversion cycle stood at 391.10 days, indicating the company took approximately 391 days to convert its investments into cash. By December 2021, this figure increased to 425.85 days, suggesting a slower conversion process.
The trend continued to December 2022, where the cash conversion cycle reached 522.89 days, indicating an extended period for the company to convert investments into cash. However, by December 2023, there was a slight decrease in the cycle to 473.98 days, suggesting some improvement in the conversion efficiency.
Looking at the latest data for December 2024, the cash conversion cycle decreased to 449.76 days. Although still high, this indicates a potential effort by the company to enhance its operational efficiency in converting investments into cash.
Overall, a longer cash conversion cycle may indicate inefficiencies in managing inventory, collecting receivables, or paying payables, posing potential liquidity challenges. Monitoring this metric will be crucial for Universal Display to ensure optimized working capital management and enhance cash flow generation.
Peer comparison
Dec 31, 2024