Ultra Clean Holdings Inc (UCTT)
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 | 79.86 | 93.80 | 84.86 | 82.80 | 59.49 |
| Days of sales outstanding (DSO) | days | 41.95 | 38.05 | 39.00 | 43.44 | 37.97 |
| Number of days of payables | days | 44.54 | 48.32 | 48.46 | 72.69 | 40.00 |
| Cash conversion cycle | days | 77.27 | 83.53 | 75.40 | 53.55 | 57.46 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 79.86 + 41.95 – 44.54
= 77.27
Ultra Clean Holdings Inc's cash conversion cycle has exhibited some fluctuations over the years. In December 2020, the company's cash conversion cycle was 57.46 days, indicating that it took approximately 57.46 days to convert raw materials into cash receipts from sales.
By December 2021, the cash conversion cycle decreased to 53.55 days, suggesting an improvement in the efficiency of the company's working capital management. However, in December 2022, the cycle increased significantly to 75.40 days, indicating a potential delay in converting inventory into cash.
The trend continued in December 2023, with the cash conversion cycle further increasing to 83.53 days, which implies a longer period required to convert inventory into cash.
In December 2024, there was a slight improvement, with the cash conversion cycle decreasing to 77.27 days. However, it still remains higher compared to the initial years analyzed.
Overall, the fluctuation in Ultra Clean Holdings Inc's cash conversion cycle suggests the need for the company to focus on optimizing its working capital management and inventory turnover to enhance operational efficiency and cash flow.
Peer comparison
Dec 31, 2024