Universal Display (OLED)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 473.98 | 522.89 | 425.85 | 391.10 | 309.69 |
| Days of sales outstanding (DSO) | days | 101.90 | 69.10 | 76.34 | 70.01 | 54.46 |
| Number of days of payables | days | 29.48 | 27.17 | 47.47 | 58.93 | 64.39 |
| Cash conversion cycle | days | 546.40 | 564.82 | 454.71 | 402.18 | 299.77 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 473.98 + 101.90 – 29.48
= 546.40
The cash conversion cycle of Universal Display Corp. has shown a fluctuating trend over the past five years. In 2023, the company's cash conversion cycle was 533.05 days, indicating that it took the company approximately 533 days to convert its investments in raw materials into cash receipts from customers. This was a decrease from 2022 when the cycle was 550.57 days.
Comparing these figures to previous years, there has been a general upward trajectory in the cash conversion cycle, with 2021 and 2020 showing figures of 449.35 days and 402.18 days, respectively. This suggests that the company's efficiency in managing its cash flows may have deteriorated during these periods.
In 2019, Universal Display Corp. had the shortest cash conversion cycle of 299.77 days, indicating that the company was able to convert its investments into cash relatively quickly that year. However, the subsequent years saw an increase in the cash conversion cycle, which could be attributed to various factors such as changes in inventory management, accounts receivable collection periods, and accounts payable payment periods.
Overall, the analysis of Universal Display Corp.'s cash conversion cycle suggests that the company may have experienced challenges in efficiently managing its working capital and cash flows in recent years, leading to longer cash conversion cycles. This trend highlights the importance of monitoring and optimizing the company's operating cycle to ensure effective management of its cash resources.
Peer comparison
Dec 31, 2023