SolarEdge Technologies Inc (SEDG)

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	132.54	231.82	117.48	103.97	121.32
Days of sales outstanding (DSO)	days	—	6.80	—	98.02	68.87
Number of days of payables	days	19.19	62.07	74.08	68.94	59.27
Cash conversion cycle	days	113.36	176.55	43.40	133.05	130.92

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 132.54 + — – 19.19
= 113.36

The cash conversion cycle of SolarEdge Technologies Inc has exhibited fluctuations over the years, indicating changes in the efficiency of its cash management processes.

As of December 31, 2020, the company's cash conversion cycle was 130.92 days, suggesting that it took approximately that amount of time to convert its investments in inventory and other resources into cash inflows from sales.

By December 31, 2021, the cash conversion cycle increased slightly to 133.05 days, indicating a potential slowdown in the company's collection of receivables or management of inventory levels.

However, by December 31, 2022, the cash conversion cycle notably decreased to 43.40 days, which could signal improved efficiency in the company's working capital management, leading to quicker conversion of investments into cash.

The cycle increased significantly by December 31, 2023, reaching 176.55 days, which may imply challenges in managing aspects of the cash conversion process like accounts receivable, inventory turnover, and payables.

As of December 31, 2024, the cash conversion cycle decreased to 113.36 days, indicating a potential improvement in the company's overall cash management efficiency compared to the previous year, albeit still higher than the levels observed in 2022.

Overall, the varying trends in SolarEdge Technologies Inc's cash conversion cycle highlight the importance of monitoring working capital efficiency to enhance cash flow and operational effectiveness.