Lear Corporation (LEA)
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 | 26.94 | 29.60 | 28.26 | 28.87 | 29.49 | 30.62 | 29.85 | 30.58 | 29.48 | 30.48 | 32.22 | 33.49 | 32.10 | 35.72 | 31.44 | 32.06 | 32.09 | 29.53 | 29.23 | 27.61 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 26.94 | 29.60 | 28.26 | 28.87 | 29.49 | 30.62 | 29.85 | 30.58 | 29.48 | 30.48 | 32.22 | 33.49 | 32.10 | 35.72 | 31.44 | 32.06 | 32.09 | 29.53 | 29.23 | 27.61 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 26.94 + — – —
= 26.94
The cash conversion cycle of Lear Corporation has shown fluctuations over the years based on the provided data. The cash conversion cycle represents the time it takes for a company to convert its investments in raw materials into cash received from sales.
From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from a low of 26.94 days to a high of 35.72 days. A lower cash conversion cycle indicates that the company is able to efficiently convert its investments in inventory and accounts receivable into cash.
Lear Corporation experienced a decreasing trend in the cash conversion cycle from September 2021 to December 2024, suggesting an improvement in its efficiency in managing cash flow. However, there was a slight increase in the cycle in the first three months of 2025, indicating a potential slowdown in the conversion of investments into cash.
Overall, monitoring the cash conversion cycle is essential for evaluating the company's liquidity and operational efficiency in managing its working capital. A shorter cycle can indicate effective inventory management, timely receivables collection, and efficient payment of liabilities.
Peer comparison
Dec 31, 2024