Lincoln Electric Holdings Inc (LECO)

Short-term

Turnover ratios

Based on the provided data, we can analyze Lincoln Electric Holdings Inc's activity ratios as follows:

1. Inventory Turnover:
- The inventory turnover ratio measures the efficiency of inventory management. Lincoln Electric's inventory turnover fluctuated over the period, ranging from a low of 3.66 in June 2022 to a high of 4.84 in December 2023. Generally, a higher turnover indicates better inventory management efficiency, leading to lower holding costs and potentially higher profitability.

2. Receivables Turnover:
- The receivables turnover ratio indicates how efficiently the company is collecting on its credit sales. Unfortunately, no data was provided for Lincoln Electric's receivables turnover, making it difficult to assess the effectiveness of the company's credit policies and collection procedures.

3. Payables Turnover:
- The payables turnover ratio reflects how quickly the company pays its suppliers. Similarly to receivables turnover, no data was provided for Lincoln Electric's payables turnover, making it challenging to evaluate the company's payment practices and relationships with suppliers.

4. Working Capital Turnover:
- The working capital turnover ratio shows how efficiently the company is utilizing its working capital to generate sales. Lincoln Electric's working capital turnover varied during the period, with a peak of 7.28 in March 2020 and a low of 4.44 in March 2024. A higher turnover indicates efficient utilization of resources, but it's important to consider other factors such as industry norms and specific business strategies.

In conclusion, while Lincoln Electric Holdings Inc has demonstrated varying levels of efficiency in managing its inventory and working capital over the period, the lack of data for receivables and payables turnover limits a comprehensive analysis of the company's overall activity ratios. To gain a more complete understanding of the company's financial performance and operational effectiveness, additional information on receivables and payables turnover would be necessary.

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Average number of days

Based on the provided data for Lincoln Electric Holdings Inc., we can analyze the activity ratios as follows:

1. Days of Inventory on Hand (DOH):
The DOH measures the average number of days it takes for a company to sell its inventory. Lincoln Electric Holdings Inc.'s DOH has shown some fluctuations over the past few years, ranging from a low of 74.18 days to a high of 99.66 days. Generally, a lower DOH is preferred as it indicates quicker inventory turnover. The company's DOH peaked in June 2022, reflecting a potential slowdown in inventory management efficiency, but it has since improved slightly.

2. Days of Sales Outstanding (DSO):
DSO represents the average number of days it takes for a company to collect payment after making a sale. Unfortunately, the data for DSO is not provided, making it challenging to assess Lincoln Electric Holdings Inc.'s efficiency in collecting receivables. DSO is a critical metric in evaluating cash flow management and liquidity.

3. Number of Days of Payables:
The number of days of payables indicates how long a company takes to pay its suppliers. Unfortunately, the data for this ratio is also not available. A longer period of payables may indicate favorable terms with suppliers, which can aid in cash flow management.

Overall, the analysis of activity ratios such as DOH, DSO, and payables turnover is crucial in understanding a company's operational efficiency, inventory management, and cash flow dynamics. A comprehensive evaluation of these ratios can provide insights into Lincoln Electric Holdings Inc.'s performance in these areas over time.

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Long-term

Fixed Asset Turnover Ratio Analysis:

The fixed asset turnover ratio measures how efficiently a company generates sales from its fixed assets. Lincoln Electric Holdings Inc's fixed asset turnover ratio has shown a consistent increasing trend from March 2020 to June 2023, indicating improved efficiency in utilizing its fixed assets to generate revenue. The ratio saw a peak at 7.50 in September 2022 before slightly declining to 6.90 by December 2022.

In the subsequent periods, the fixed asset turnover ratio remained relatively stable, hovering around 7.00, indicating that the company continued to effectively utilize its fixed assets. It is noteworthy that there were missing data points from September 2023 onwards, suggesting potential data unavailability or changes in reporting structure.

Total Asset Turnover Ratio Analysis:

The total asset turnover ratio evaluates the company's ability to generate sales from its total assets. Lincoln Electric Holdings Inc's total asset turnover ratio exhibited fluctuation throughout the analyzed period. The ratio decreased from 1.28 in March 2020 to a low of 1.15 in December 2020.

The ratio then experienced a mixed pattern of fluctuations, reaching a high of 1.39 in September 2022 before declining to 1.10 in September 2024. This decreasing trend in recent periods suggests a potential decrease in the company's effectiveness in generating sales relative to its total assets, which may require further investigation and strategic assessment.

Overall, the company's long-term activity ratios reveal varying trends in the utilization of both fixed and total assets to generate sales, highlighting the importance of efficient asset management for sustainable growth and profitability.