UFP Technologies Inc (UFPT)

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 56.63 81.47 78.69 76.54 74.11 75.49 68.65 61.72 61.50 67.38 72.89 73.67 63.49 43.83 44.29 43.16 40.22 41.23 43.41 40.66
Days of sales outstanding (DSO) days 61.27 70.46 53.44 55.17 59.24 57.53 61.06 57.16 56.18 69.43 76.10 73.71 69.66 60.70 60.71 61.10 53.89 55.39 52.37 55.07
Number of days of payables days 15.70 24.13 23.18 24.50 23.53 29.16 27.36 22.29 22.93 26.16 33.80 26.66 20.15 15.28 17.49 12.89 8.89 9.62 11.21 15.14
Cash conversion cycle days 102.20 127.80 108.95 107.22 109.82 103.87 102.35 96.60 94.75 110.65 115.19 120.72 113.01 89.25 87.52 91.37 85.22 87.00 84.56 80.59

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 56.63 + 61.27 – 15.70
= 102.20

The cash conversion cycle of UFP Technologies Inc has shown some fluctuations over the periods analyzed. The company's cash conversion cycle measures the time it takes for the company to convert its resources invested in inventory and accounts receivable into cash flows from sales.

Initially, in March 2020, the cash conversion cycle was 80.59 days, indicating that UFP Technologies was able to efficiently manage its working capital and convert inventory and receivables into cash within that timeframe. However, by March 2024, the cash conversion cycle had increased to 107.22 days, suggesting a lengthening in the time it took for the company to convert its working capital into cash.

Throughout the analyzed periods, there were fluctuations in the cash conversion cycle, but it generally trended upwards towards the end of the period. The increase in the cash conversion cycle may indicate challenges in managing inventory levels efficiently or collecting accounts receivable promptly.

Overall, a rising cash conversion cycle can impact the company's liquidity and working capital management. This trend warrants further investigation to determine the underlying factors contributing to the lengthening cycle and to implement strategies to improve working capital efficiency in the future.