Universal Display (OLED)
Cash conversion cycle
| 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 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 473.98 | 511.48 | 484.05 | 498.03 | 522.89 | 505.77 | 487.06 | 418.74 | 425.85 | 404.04 | 375.81 | 428.87 | 391.10 | 400.30 | 437.04 | 329.62 | 309.69 | 279.30 | 295.29 | 401.23 |
| Days of sales outstanding (DSO) | days | 101.90 | 89.57 | 73.80 | 66.47 | 69.10 | 56.44 | 55.25 | 75.38 | 76.34 | 64.00 | 69.63 | 73.98 | 70.01 | 93.21 | 67.67 | 70.16 | 54.46 | 64.26 | 69.11 | 65.24 |
| Number of days of payables | days | 29.48 | 58.15 | 20.18 | 27.84 | 27.17 | 37.49 | 41.31 | 79.12 | 47.47 | 36.38 | 37.11 | 62.33 | 58.93 | 45.82 | 52.97 | 46.15 | 64.39 | 44.56 | 38.03 | 41.42 |
| Cash conversion cycle | days | 546.40 | 542.90 | 537.68 | 536.65 | 564.82 | 524.72 | 501.00 | 415.01 | 454.71 | 431.66 | 408.33 | 440.52 | 402.18 | 447.69 | 451.74 | 353.63 | 299.77 | 299.00 | 326.37 | 425.05 |
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. measures the time it takes for the company to convert its investments in inventory into cash receipts from customers. Over the past eight quarters, the trend in Universal Display Corp.'s cash conversion cycle has fluctuated, showing variability in managing its working capital efficiently.
In Q1 2022, Universal Display Corp. had the shortest cash conversion cycle of 406.83 days, indicating that the company was efficient in converting inventory into cash during that period. However, the company's cash conversion cycle increased in subsequent quarters, reaching a peak of 550.57 days in Q4 2022, reflecting a lengthened cycle and potential challenges in managing inventory turnover and collection of receivables.
In more recent quarters, the cash conversion cycle has stabilized in the range of 529-533 days, suggesting that Universal Display Corp. may have implemented measures to improve its working capital management. However, the company may still face opportunities to further optimize its cash conversion cycle to enhance its liquidity position and operational efficiency. Tracking the cash conversion cycle over time can provide insight into Universal Display Corp.'s ability to effectively manage its working capital and convert investments into cash flow.
Peer comparison
Dec 31, 2023