L3Harris Technologies Inc (LHX)

Cash conversion cycle

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
Cash conversion cycle days 30.72 37.56 38.83 28.82 27.56

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 30.72 + — – —
= 30.72

To analyze the cash conversion cycle of L3Harris Technologies Inc based on the provided data:

1. The cash conversion cycle (CCC) represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

2. The CCC increased from 27.56 days at the end of December 2020 to 28.82 days at the end of December 2021, indicating a slight delay in cash conversion.

3. By the end of December 2022, the CCC extended to 38.83 days, showing a significant increase in the time it takes for L3Harris Technologies Inc to convert its investments into cash.

4. Although there was a slight improvement by the end of December 2023 with a CCC of 37.56 days, the cycle remained higher compared to the initial period in 2020.

5. Subsequently, the CCC decreased to 30.72 days by the end of December 2024, which might suggest a more efficient management of working capital compared to the previous years.

6. Overall, the trend in L3Harris Technologies Inc's cash conversion cycle indicates fluctuations in the efficiency of its working capital management over the years, with efforts needed to optimize the cycle for improved cash flow generation and operational efficiency.