Lincoln Electric Holdings Inc (LECO)
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 | 78.31 | 75.70 | 97.92 | 91.00 | 78.00 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 78.31 | 75.70 | 97.92 | 91.00 | 78.00 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 78.31 + — – —
= 78.31
The cash conversion cycle is a key indicator of how efficiently a company manages its working capital. For Lincoln Electric Holdings Inc, the cash conversion cycle has shown fluctuations over the years.
In 2020, the cash conversion cycle was 78.00 days, which increased to 91.00 days in 2021, indicating a potential slowdown in the company's ability to convert its inventory into cash. The trend continued in 2022 with a further increase to 97.92 days, suggesting possible challenges in managing accounts receivable and inventory efficiently.
However, there was an improvement in 2023, with the cash conversion cycle decreasing to 75.70 days, which could signal better working capital management practices. In 2024, the cycle slightly increased to 78.31 days, still showing effective conversion of inventory and receivables into cash compared to the previous year.
Overall, Lincoln Electric Holdings Inc's cash conversion cycle has displayed some fluctuations, highlighting the need to closely monitor and optimize working capital processes to maintain efficiency and liquidity in the business operations.
Peer comparison
Dec 31, 2024