Tesla Inc (TSLA)

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	54.66	62.87	77.32	52.25	60.10
Days of sales outstanding (DSO)	days	16.51	13.23	13.26	13.05	21.93
Number of days of payables	days	56.74	66.58	91.87	90.98	88.68
Cash conversion cycle	days	14.43	9.52	-1.29	-25.69	-6.64

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 54.66 + 16.51 – 56.74
= 14.43

The cash conversion cycle of Tesla Inc has shown significant fluctuation over the years. As of December 31, 2020, the company had a negative cash conversion cycle of -6.64 days, indicating that it was able to convert its investments in inventory and receivables into cash more rapidly than paying off its liabilities. This efficiency improved further by December 31, 2021, with a cash conversion cycle of -25.69 days, suggesting even faster conversion of resources into cash.

However, by December 31, 2022, the cash conversion cycle decreased to -1.29 days, implying that Tesla took slightly longer to convert its investments into cash compared to the previous year. There was a notable shift by December 31, 2023, when the cash conversion cycle turned positive at 9.52 days, indicating that the company took more time to convert its investments into cash and repay its liabilities.

As of December 31, 2024, the trend continued, with a cash conversion cycle of 14.43 days, suggesting a further increase in the time taken by Tesla to convert its investments into cash. Overall, these fluctuations in the cash conversion cycle reflect changes in Tesla's operating efficiency and liquidity management over the years.