Laboratory Corporation of America Holdings (LH)
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 | 19.18 | 19.24 | 17.93 | 19.51 | 19.69 | 15.23 | 16.44 | 16.55 | 15.48 | 18.34 | 15.92 | 15.17 | 13.96 | 14.41 | 15.29 | 16.44 | 17.11 | 16.71 | 14.97 | 11.04 |
| Days of sales outstanding (DSO) | days | 54.33 | 59.06 | 61.00 | 61.61 | 57.20 | 47.18 | 46.45 | 57.68 | 51.64 | 57.18 | 53.87 | 51.24 | 50.89 | 51.49 | 49.22 | 55.37 | 64.75 | 61.46 | 52.84 | 46.69 |
| Number of days of payables | days | 34.06 | 26.33 | 30.88 | 28.56 | 34.34 | 22.81 | 24.04 | 30.28 | 28.03 | 30.02 | 27.53 | 21.47 | 21.60 | 23.49 | 21.77 | 23.89 | 25.84 | 27.23 | 23.35 | 24.72 |
| Cash conversion cycle | days | 39.45 | 51.97 | 48.06 | 52.56 | 42.55 | 39.60 | 38.86 | 43.95 | 39.08 | 45.50 | 42.25 | 44.94 | 43.24 | 42.41 | 42.74 | 47.92 | 56.03 | 50.95 | 44.45 | 33.01 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 19.18 + 54.33 – 34.06
= 39.45
The cash conversion cycle of Laboratory Corporation of America Holdings has shown some fluctuations over the analyzed periods. The company's cash conversion cycle ranged between a low of 33.01 days on March 31, 2020, and a high of 56.03 days on December 31, 2020.
Overall, the trend in the cash conversion cycle shows a moderate level of volatility, with peaks and troughs occurring periodically. The cycle measures the time it takes for the company to convert its investments in inventory into cash flows from sales. The lower the cycle, the more efficient the company is in managing its working capital.
While there have been some fluctuations in the cash conversion cycle, it seems that Laboratory Corporation of America Holdings has generally been able to maintain a relatively stable cycle duration. Keeping the cycle under control is essential for the company to manage its liquidity effectively and optimize its cash flows. It is important for the company to continue monitoring and managing its cash conversion cycle to ensure operational efficiency and financial stability.
Peer comparison
Dec 31, 2024