Power Integrations Inc (POWI)
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 | 276.25 | 238.75 | 229.33 | 203.81 | 173.90 | 143.11 | 125.67 | 112.42 | 105.74 | 98.61 | 103.42 | 117.62 | 153.44 | 170.57 | 173.48 | 162.74 | 159.16 | 164.92 | 168.35 | 158.97 |
Days of sales outstanding (DSO) | days | 12.05 | 21.71 | 22.76 | 13.06 | 11.68 | 8.39 | 14.27 | 15.72 | 21.48 | 20.82 | 24.12 | 27.92 | 26.84 | 23.77 | 10.56 | 17.04 | 21.06 | 24.76 | 24.25 | 19.07 |
Number of days of payables | days | 44.68 | 45.37 | 62.07 | 49.64 | 38.64 | 35.18 | 46.77 | 39.44 | 46.57 | 43.38 | 48.34 | 49.61 | 51.77 | 71.00 | 71.54 | 62.57 | 48.31 | 56.78 | 67.92 | 62.47 |
Cash conversion cycle | days | 243.62 | 215.09 | 190.01 | 167.23 | 146.94 | 116.32 | 93.18 | 88.70 | 80.65 | 76.05 | 79.21 | 95.94 | 128.51 | 123.35 | 112.50 | 117.21 | 131.91 | 132.90 | 124.68 | 115.57 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 276.25 + 12.05 – 44.68
= 243.62
The cash conversion cycle of Power Integrations Inc. has shown a fluctuating trend over the past eight quarters. The company's cash conversion cycle has gradually increased from 88.70 days in Q1 2022 to 243.62 days in Q4 2023, indicating a lengthening time taken to convert its investments in inventory and accounts receivable into cash.
A rising cash conversion cycle suggests that Power Integrations Inc. is taking longer to sell its inventory and collect payment from customers, which could potentially strain its liquidity and working capital management. It might also indicate inefficiencies in the company's operations or challenges in managing its accounts receivable and inventory levels effectively.
It is crucial for Power Integrations Inc. to closely monitor and manage its cash conversion cycle to ensure optimal cash flow and working capital efficiency. Analyzing the reasons behind the prolonged cash conversion cycle and implementing strategies to streamline operations, improve inventory management, and expedite receivables collection could help the company enhance its overall financial performance and liquidity position.
Peer comparison
Dec 31, 2023