Ultra Clean Holdings Inc (UCTT)

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 79.87 89.42 93.20 94.94 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
Days of sales outstanding (DSO) days 41.96 42.07 40.31 39.91 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
Number of days of payables days 44.55 51.79 53.37 52.77 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
Cash conversion cycle days 77.28 79.70 80.14 82.08 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

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 79.87 + 41.96 – 44.55
= 77.28

The cash conversion cycle of Ultra Clean Holdings Inc has shown fluctuations over the period provided. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from a low of 28.50 days in June 30, 2022, to a high of 83.53 days in December 31, 2023. Generally, a lower cash conversion cycle is favorable as it indicates that the company is efficiently managing its working capital.

The trend in the cash conversion cycle for Ultra Clean Holdings Inc appears to have some volatility, with periods of decrease followed by periods of increase. The company seems to have made improvements in managing its inventory and receivables more efficiently in the first half of the period. However, from September 30, 2023, to December 31, 2024, the cash conversion cycle started to increase, suggesting potential challenges in working capital management.

It is essential for the company to closely monitor its cash conversion cycle and implement strategies to optimize working capital efficiency to ensure smooth operations and sustainable growth in the future.