ON Semiconductor Corporation (ON)

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	176.41	173.88	164.43	153.79	138.89	137.57	140.30	134.87	125.08	122.36	125.26	130.46	129.06	133.36	132.64	128.84	126.92	127.15	129.15	122.44
Days of sales outstanding (DSO)	days	41.37	41.94	41.28	38.55	36.92	38.78	54.53	46.15	43.83	41.45	41.29	45.71	46.95	51.00	46.18	44.00	46.63	46.55	45.04	43.65
Number of days of payables	days	60.61	76.00	75.96	82.72	73.20	69.14	71.24	65.39	57.59	55.23	58.38	60.93	59.08	55.60	53.96	51.86	55.98	54.74	55.04	58.29
Cash conversion cycle	days	157.16	139.82	129.75	109.62	102.61	107.22	123.58	115.63	111.33	108.57	108.17	115.24	116.93	128.76	124.86	120.98	117.57	118.96	119.15	107.80

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 176.41 + 41.37 – 60.61
= 157.16

The cash conversion cycle of ON Semiconductor Corp. has shown fluctuations over the past eight quarters. In Q4 2023, the company's cash conversion cycle reached 157.16 days, indicating that it takes approximately 157 days for the company to convert its investments in inventory and other resources back into cash. This was an increase from the previous quarter but still higher than the levels seen in earlier quarters.

In Q3 2023, the cash conversion cycle decreased to 139.82 days, signaling an improvement in the company's efficiency in managing its working capital. However, the cycle increased again in Q2 2023 to 129.75 days, before dropping significantly to 109.62 days in Q1 2023. This suggests that the company was able to convert its resources into cash faster in the first quarter of 2023 compared to the previous periods.

Comparing the Q1 2023 performance to the same quarter in the previous year, there was a notable increase in the cash conversion cycle from 102.61 days in Q1 2022 to 109.62 days in Q1 2023. Despite this increase, the company's efficiency in managing working capital improved over the course of Q2 and Q3 2023 before deteriorating again in Q4 2023.

Overall, while there were fluctuations in ON Semiconductor Corp.'s cash conversion cycle over the past eight quarters, the company should continue to focus on optimizing its working capital management to improve its cash flow efficiency.