SolarEdge Technologies Inc (SEDG)

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	132.54	158.15	375.78	304.07	231.82	169.93	140.21	131.14	117.48	101.06	97.17	102.16	103.97	93.39	110.11	127.67	121.32	105.76	90.52	68.91
Days of sales outstanding (DSO)	days	—	11.26	19.88	10.03	6.80	0.84	128.72	119.92	—	103.43	99.23	111.61	98.02	85.83	79.30	69.18	68.87	44.00	41.66	54.27
Number of days of payables	days	19.19	18.76	33.56	33.65	62.07	57.61	61.91	61.28	74.08	56.09	52.36	57.07	68.94	42.18	48.29	45.83	59.27	43.48	54.17	48.29
Cash conversion cycle	days	113.36	150.64	362.10	280.46	176.55	113.16	207.01	189.78	43.40	148.40	144.04	156.69	133.05	137.04	141.12	151.02	130.92	106.28	78.01	74.89

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 shown fluctuations over the periods reported. The cycle lengthened from 74.89 days as of March 31, 2020 to 362.10 days as of June 30, 2024, indicating a significant increase in the time it takes to convert resources into cash during the company's operations.

Generally, a longer cash conversion cycle may indicate inefficiencies in managing the company's working capital. However, from June 30, 2024 to December 31, 2024, there was a notable improvement as the cycle decreased to 113.36 days. This decrease may suggest that the company enhanced its management of accounts payable, accounts receivable, and inventory turnover efficiency during this period.

It is important for SolarEdge Technologies Inc to closely monitor and manage its cash conversion cycle to ensure optimal cash flow and liquidity. Strategies to improve the cycle efficiency may include negotiating better payment terms with suppliers, streamlining inventory management, and optimizing accounts receivable collection processes.