Lincoln Electric Holdings Inc (LECO)
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 | 78.31 | 86.98 | 81.63 | 77.99 | 75.36 | 83.97 | 94.01 | 94.43 | 97.92 | 95.02 | 99.66 | 96.95 | 91.00 | 92.99 | 88.34 | 83.29 | 78.00 | 79.68 | 82.21 | 74.18 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 78.31 | 86.98 | 81.63 | 77.99 | 75.36 | 83.97 | 94.01 | 94.43 | 97.92 | 95.02 | 99.66 | 96.95 | 91.00 | 92.99 | 88.34 | 83.29 | 78.00 | 79.68 | 82.21 | 74.18 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 78.31 + — – —
= 78.31
The cash conversion cycle of Lincoln Electric Holdings Inc has shown some fluctuations over the periods analyzed. The company's cash conversion cycle measures the average number of days it takes for Lincoln Electric Holdings Inc to convert its investments in inventory and other resources into cash flows from sales.
From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from a low of 74.18 days to a high of 99.66 days. The trend indicates that the cash conversion cycle initially increased from around 74 days in March 2020 to almost 100 days in June 2022. However, following this peak, there was a gradual decrease back to around 78 days by December 2024.
A longer cash conversion cycle suggests that Lincoln Electric Holdings Inc takes more time to turn its investments into cash, which may impact its liquidity and working capital management. On the other hand, a shorter cycle implies efficient management of inventory and receivables, leading to quicker cash generation.
Analyzing the cash conversion cycle can help stakeholders evaluate the company's operational efficiency, inventory management, and collection practices. Lincoln Electric Holdings Inc should monitor this metric regularly to ensure optimal working capital utilization and overall financial health.
Peer comparison
Dec 31, 2024