Veeco Instruments Inc (VECO)
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 | 217.90 | 227.43 | 197.19 | 182.88 | 204.94 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 217.90 | 227.43 | 197.19 | 182.88 | 204.94 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 217.90 + — – —
= 217.90
The cash conversion cycle is a crucial metric for assessing how efficiently a company manages its working capital. Analyzing the trend in Veeco Instruments Inc's cash conversion cycle over the past five years, we observe the following:
1. In December 31, 2020, Veeco's cash conversion cycle was 204.94 days. This indicates that on average, it took the company over 200 days to convert its investments in inventory and accounts receivable into cash.
2. By December 31, 2021, Veeco had managed to reduce its cash conversion cycle to 182.88 days, reflecting an improvement in its efficiency in managing working capital.
3. However, in December 31, 2022, the cash conversion cycle increased slightly to 197.19 days, suggesting a possible delay in converting assets into cash compared to the previous year.
4. The trend continued in December 31, 2023, with the cash conversion cycle escalating to 227.43 days, signifying a significant increase in the time taken to convert working capital components into cash.
5. By December 31, 2024, Veeco was able to bring down its cash conversion cycle to 217.90 days, although still higher than the levels seen in 2021 and 2022.
Overall, the fluctuation in Veeco's cash conversion cycle indicates varying levels of efficiency in managing its working capital over the years. The company should continue to focus on optimizing its inventory and accounts receivable processes to shorten the cash conversion cycle and improve its overall liquidity and financial performance.
Peer comparison
Dec 31, 2024