Onto Innovation Inc (ONTO)
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 | 221.92 | 302.41 | 254.02 | 246.61 | 251.02 |
| Days of sales outstanding (DSO) | days | 113.92 | 101.36 | 87.66 | — | 97.89 |
| Number of days of payables | days | 43.51 | 46.01 | 42.71 | 54.11 | 52.75 |
| Cash conversion cycle | days | 292.33 | 357.75 | 298.96 | 192.50 | 296.16 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 221.92 + 113.92 – 43.51
= 292.33
The cash conversion cycle of Onto Innovation Inc has shown fluctuations over the years based on the provided data. In December 31, 2020, the company's cash conversion cycle was 296.16 days, indicating that it took the company approximately 296 days to convert its investments in raw materials and other inputs into cash receipts from sales.
By December 31, 2021, Onto Innovation Inc managed to improve its cash conversion cycle to 192.50 days, suggesting a more efficient utilization of its working capital. This reduction in the cash conversion cycle signals that the company has been able to speed up the conversion of inventory into cash.
However, in December 31, 2022, the cash conversion cycle increased to 298.96 days, surpassing the previous year's figure. This rise may indicate a delay in the company's ability to collect cash from its sales relative to the time it takes to pay suppliers.
In December 31, 2023, the cash conversion cycle continued to climb to 357.75 days, indicating a significant lag in the conversion of investments in inventory into cash receipts from sales. This may raise concerns about the company's liquidity position and operational efficiency.
Subsequently, by December 31, 2024, Onto Innovation Inc managed to reduce its cash conversion cycle to 292.33 days, showing a slight improvement compared to the prior year. This reduction may suggest efforts to streamline inventory management and enhance cash flow generation.
Overall, Onto Innovation Inc's cash conversion cycle has shown variability, with fluctuations in different periods. Analyzing the trends in the cash conversion cycle can provide insights into the company's operational efficiency, working capital management, and overall financial health.
Peer comparison
Dec 31, 2024