Littelfuse Inc (LFUS)
Cash conversion cycle
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 96.65 | 95.80 | 103.24 | 111.71 | 104.26 | 104.82 | 102.97 | 100.50 | 99.90 | 109.71 | 108.16 | 108.11 | 102.99 | 96.77 | 100.39 | 89.82 | 90.39 | 91.64 | 92.70 | 91.08 |
| Days of sales outstanding (DSO) | days | 45.19 | 49.43 | 50.29 | — | 45.43 | — | — | — | 49.14 | 62.40 | 64.75 | 65.02 | 59.04 | 61.48 | 50.78 | 53.29 | 49.85 | 53.47 | 55.15 | 51.67 |
| Number of days of payables | days | 35.34 | 33.06 | 33.95 | 38.18 | 39.70 | 42.91 | 45.60 | 45.42 | 49.77 | 68.18 | 68.11 | 65.85 | 58.28 | 47.99 | 46.05 | 42.21 | 44.65 | 40.93 | 44.86 | 44.93 |
| Cash conversion cycle | days | 106.50 | 112.17 | 119.57 | 73.53 | 109.98 | 61.91 | 57.37 | 55.08 | 99.26 | 103.93 | 104.80 | 107.28 | 103.76 | 110.25 | 105.12 | 100.91 | 95.59 | 104.18 | 103.00 | 97.81 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 96.65 + 45.19 – 35.34
= 106.50
The cash conversion cycle of Littelfuse Inc fluctuated over the past years, reflecting changes in the company's efficiency in managing its working capital. The cycle represents the time it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
From December 2019 to December 2023, the cash conversion cycle ranged between 55.08 days to 119.57 days, indicating some variability in the company's operational efficiency during this period. A shorter cash conversion cycle is generally preferred as it signifies that the company is able to quickly generate cash from its operations.
In analyzing the trend, the cycle peaked in June 2023 at 119.57 days, which could indicate challenges in managing inventory levels or delays in collecting receivables. However, the cycle decreased to 73.53 days by March 2023, showing a positive improvement in the efficiency of the company's working capital management.
Furthermore, the cycles from June 2022 to March 2023 were relatively stable between 57.37 to 73.53 days, indicating a period of consistency in Littelfuse Inc's ability to efficiently convert its working capital into cash.
Overall, the variations in the cash conversion cycle suggest that Littelfuse Inc may have experienced fluctuations in its operational efficiency and effectiveness in managing working capital over the analyzed period. It would be essential for the company to continue monitoring and improving its cash conversion cycle to maximize cash flow and optimize its financial performance.
Peer comparison
Dec 31, 2023