Ormat Technologies Inc (ORA)

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	18.50	10.65	15.30	30.05	26.76
Days of sales outstanding (DSO)	days	142.75	96.11	81.33	204.27	182.55
Number of days of payables	days	57.78	36.17	40.42	64.46	56.10
Cash conversion cycle	days	103.47	70.59	56.21	169.86	153.21

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 18.50 + 142.75 – 57.78
= 103.47

The cash conversion cycle of Ormat Technologies Inc has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle increased to 57.77 days from 45.40 days in 2022. This suggests that it took the company longer to convert its investments in inventory and other resources into cash during the most recent year. However, compared to 2021, where the cash conversion cycle was 40.23 days, the company took relatively longer to convert its investments into cash in 2023.

In 2020, the cash conversion cycle was 64.78 days, indicating an improvement compared to 2019 when it was 75.82 days. This suggests that in 2020, the company managed its working capital more efficiently, resulting in a shorter cash conversion cycle.

Overall, the trend of Ormat Technologies Inc's cash conversion cycle indicates some variability in the efficiency of the company's working capital management over the past five years. It is important for the company to closely monitor and manage its inventory, accounts receivable, and accounts payable to improve its cash conversion cycle and overall liquidity position.