Power Integrations Inc (POWI)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	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
Days of inventory on hand (DOH)	days	311.23	322.91	315.66	295.78	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
Days of sales outstanding (DSO)	days	23.67	15.06	14.47	10.42	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
Number of days of payables	days	55.98	52.17	46.14	48.21	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
Cash conversion cycle	days	278.92	285.79	283.99	257.99	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

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 311.23 + 23.67 – 55.98
= 278.92

The cash conversion cycle (CCC) of Power Integrations Inc has displayed fluctuations over the periods analyzed. Initially, the CCC was relatively stable around 110-130 days from March 31, 2020, to December 31, 2021. However, starting in March 31, 2022, the CCC showed a decreasing trend, indicating an improvement in the company's ability to convert its investments in inventory and accounts receivable into cash.

Between March 31, 2022, and December 31, 2024, the CCC fluctuated between 75 and 285 days. The significant increase in the CCC observed towards the end of the period may indicate potential issues in managing working capital efficiently. It could suggest that the company may be taking longer to convert its resources into cash, which could lead to liquidity challenges if not managed effectively.

Overall, the analysis of Power Integrations Inc's CCC highlights the importance of monitoring working capital management closely to ensure optimal cash flow and financial performance. Additional insights into operational efficiency, inventory management, and accounts receivable collection practices may help in addressing any challenges and improving the company's financial health.