Veeco Instruments Inc (VECO)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 179.72 | 156.70 | 142.44 | 150.94 | 131.83 |
| Days of sales outstanding (DSO) | days | 67.44 | 71.44 | 72.62 | 69.25 | 41.96 |
| Number of days of payables | days | 32.05 | 39.42 | 37.06 | 34.82 | 21.08 |
| Cash conversion cycle | days | 215.11 | 188.72 | 178.00 | 185.38 | 152.71 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 179.72 + 67.44 – 32.05
= 215.11
Based on the data provided, Veeco Instruments Inc's cash conversion cycle has shown variability over the past five years. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
In 2023, the cash conversion cycle increased to 243.29 days from 217.76 days in 2022. This indicates that, on average, it took Veeco Instruments Inc approximately 243.29 days to convert its investments in inventory and other resources into cash flows from sales. The increase in the cash conversion cycle may suggest inefficiencies in managing inventory, accounts receivable, and accounts payable.
Comparing to previous years, the cash conversion cycle was higher in 2020 at 221.95 days and 2018 at 195.98 days, indicating potential delays in converting investments into cash during those periods. However, in 2021, the company was able to reduce its cash conversion cycle to 203.89 days, reflecting a more efficient conversion process.
It is important for Veeco Instruments Inc to monitor and manage its cash conversion cycle effectively to optimize working capital management, improve cash flow, and overall financial performance. A shorter cash conversion cycle generally indicates better liquidity and efficiency in operations.
Peer comparison
Dec 31, 2023