Ultra Clean Holdings Inc (UCTT)

Cash conversion cycle

		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	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	93.80	89.57	82.08	86.88	84.86	76.32	79.23	89.72	82.80	80.18	83.09	58.41	59.49	61.24	73.45	75.06	72.38	65.87	71.02	75.64
Days of sales outstanding (DSO)	days	38.05	33.53	31.70	30.96	39.00	35.55	—	—	43.44	45.72	46.10	41.01	37.97	40.37	42.02	36.66	38.58	38.85	—	38.88
Number of days of payables	days	48.32	44.40	39.81	39.32	48.46	51.11	50.73	58.70	72.69	67.02	63.55	50.91	40.00	38.91	53.10	51.90	55.88	43.33	42.12	41.62
Cash conversion cycle	days	83.53	78.70	73.97	78.51	75.40	60.76	28.50	31.01	53.55	58.89	65.64	48.51	57.46	62.69	62.38	59.82	55.08	61.39	28.91	72.90

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 93.80 + 38.05 – 48.32
= 83.53

Ultra Clean Holdings Inc's cash conversion cycle measures the time taken to convert its investments in inventory and accounts receivable into cash inflows. The trend in the cash conversion cycle over the past few quarters shows fluctuations but generally indicates efficiency in managing its working capital.

The company's cash conversion cycle has ranged from a low of 28.50 days to a high of 83.53 days in the most recent quarter. In the last few quarters, the cash conversion cycle has generally been increasing, indicating potential delays in collecting cash from sales and/or managing inventory efficiently.

However, it is noteworthy that in previous quarters, such as in June 2022 and March 2022, the company managed to significantly reduce its cash conversion cycle, implying effective management of working capital during those periods.

Overall, Ultra Clean Holdings Inc should continue to monitor and manage its cash conversion cycle effectively to optimize working capital management and ensure efficient cash flow operations in the future.