L3Harris Technologies Inc (LHX)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 11.88 | 9.72 | 9.40 | 12.67 | 13.24 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 36.45 | 380.76 | 17.45 | 9.85 | 7.50 |
The activity ratios of L3Harris Technologies Inc reflect its efficiency in managing various aspects of its operations.
1. Inventory Turnover: L3Harris Technologies Inc experienced a slight decrease in its inventory turnover ratio from 13.24 in 2020 to 12.67 in 2021, indicating that the company is selling its inventory slightly slower. This was followed by a more significant decline to 9.40 in 2022, but there was a slight improvement to 9.72 in 2023, and a further increase to 11.88 in 2024. Overall, the company seems to be managing its inventory efficiently, with fluctuations possibly influenced by changes in demand or production levels.
2. Receivables Turnover: There is no data available for the receivables turnover ratio, which indicates that the company may not track this metric or that its accounts receivable turnover is not reported in the provided data.
3. Payables Turnover: Similar to receivables turnover, there is no data available for the payables turnover ratio, which suggests that information regarding the company's payment cycle and relationship with its suppliers is not provided or not disclosed in the available data.
4. Working Capital Turnover: L3Harris Technologies Inc's working capital turnover ratio shows a notable increase from 7.50 in 2020 to 9.85 in 2021, indicating that the company generated more revenue relative to its working capital in 2021. This was followed by a significant surge to 17.45 in 2022, suggesting a more efficient utilization of working capital. The ratio then spiked dramatically to 380.76 in 2023, likely due to a significant event or anomaly in the financial statements. Subsequently, there was a substantial decrease to 36.45 in 2024, indicating a potential normalization in the company's working capital efficiency.
In conclusion, while L3Harris Technologies Inc appears to manage its inventory effectively and shows significant variations in working capital turnover, the absence of data for receivables and payables turnovers limits a comprehensive assessment of the company's overall efficiency in managing its assets and liabilities.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 30.72 | 37.56 | 38.83 | 28.82 | 27.56 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
Based on the provided data for L3Harris Technologies Inc, we can analyze the following activity ratios:
1. Days of Inventory on Hand (DOH):
- The days of inventory on hand for L3Harris Technologies Inc have shown fluctuations over the past five years. The trend started from 27.56 days on December 31, 2020, and increased to 38.83 days by December 31, 2022. However, it decreased to 30.72 days by December 31, 2024.
- A higher number of days of inventory on hand indicates that the company may be holding onto inventory for a longer period, which could tie up capital and lead to potential obsolescence or storage costs.
2. Days of Sales Outstanding (DSO):
- Unfortunately, data for the days of sales outstanding (DSO) is not provided in the given information. DSO is a metric that shows how long it takes for a company to collect revenue after a sale is made. A lower DSO indicates better efficiency in collecting receivables.
3. Number of Days of Payables:
- Similarly, there is no data available for the number of days of payables for L3Harris Technologies Inc. This ratio would typically show the number of days the company takes to pay its suppliers. A longer payables period can indicate a company's ability to manage its cash flow efficiently.
In conclusion, based on the provided data, L3Harris Technologies Inc has experienced fluctuations in its days of inventory on hand over the past five years. However, without data on DSO and the number of days of payables, a comprehensive analysis of the company's overall efficiency in managing working capital cannot be completed.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | — | 6.21 | 8.66 |
| Total asset turnover | 0.51 | 0.47 | 0.51 | 0.51 | 0.49 |
The fixed asset turnover ratio measures how efficiently a company is utilizing its fixed assets to generate revenue. In the case of L3Harris Technologies Inc, we observe a declining trend in the fixed asset turnover ratio over the years.
In December 2020, the fixed asset turnover ratio was 8.66, indicating that L3Harris Technologies generated $8.66 in revenue for every dollar invested in fixed assets. However, this ratio decreased to 6.21 in December 2021, signaling a decrease in the efficiency of utilizing fixed assets to generate sales.
It's worth noting that data for the years 2022, 2023, and 2024 are not available (indicated as "—"), which hinders a deeper analysis of the trend.
Moving on to the total asset turnover ratio, this metric assesses how effectively a company is utilizing all of its assets to generate revenue. L3Harris Technologies Inc has maintained a relatively stable total asset turnover ratio over the years.
In December 2020, the total asset turnover ratio was 0.49, and it increased slightly to 0.51 in December 2021 and 2022. The ratio then dropped to 0.47 in December 2023 before bouncing back to 0.51 in December 2024.
Overall, the decline in fixed asset turnover may indicate potential inefficiencies in the utilization of fixed assets for revenue generation. However, the stable total asset turnover suggests that the company is effectively utilizing its total assets to generate revenue, albeit with some fluctuations in recent years.