Lincoln Electric Holdings Inc (LECO)
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 | 58.70 | 97.92 | 91.00 | 78.00 | 72.01 |
| Days of sales outstanding (DSO) | days | 47.11 | 52.55 | 48.42 | 51.34 | 45.53 |
| Number of days of payables | days | 33.94 | 51.81 | 55.66 | 52.48 | 49.93 |
| Cash conversion cycle | days | 71.87 | 98.66 | 83.77 | 76.86 | 67.62 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 58.70 + 47.11 – 33.94
= 71.87
The cash conversion cycle of Lincoln Electric Holdings, Inc. has fluctuated over the past five years, indicating changes in the efficiency of its working capital management.
In 2023, the company's cash conversion cycle decreased to 78.71 days from 98.66 days in 2022, suggesting an improvement in the company's ability to convert its investments in inventory and accounts receivable into cash.
Comparing 2023 to 2021, there was also a decrease in the cash conversion cycle from 83.77 days to 78.71 days, indicating further enhancement in operational efficiency.
However, compared to 2020 and 2019, the cash conversion cycle was slightly higher in 2023, showing a longer period to convert resources into cash. In 2020, the cash conversion cycle was 76.86 days, and in 2019, it was 67.62 days.
Overall, while there have been fluctuations in the cash conversion cycle of Lincoln Electric Holdings, Inc. over the past five years, the trend appears to show an overall improvement in working capital management efficiency.
Peer comparison
Dec 31, 2023