L3Harris Technologies Inc (LHX)

Cash conversion cycle

		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	Sep 30, 2019	Jun 30, 2019
Days of inventory on hand (DOH)	days	26.34	27.94	29.18	33.73	32.00	32.95	28.37	29.06	28.47	24.15	21.24	12.66	10.56	10.90	11.57	19.14	21.93	33.00	65.49	26.52
Days of sales outstanding (DSO)	days	22.35	22.55	152.14	171.13	133.65	135.16	128.76	130.23	—	—	122.59	—	—	22.43	27.39	22.96	27.28	36.83	47.84	25.15
Number of days of payables	days	34.88	39.98	41.75	43.50	41.76	43.92	42.74	45.10	39.48	38.18	38.22	19.88	17.03	16.56	16.72	25.84	27.92	47.40	69.60	38.67
Cash conversion cycle	days	13.82	10.51	139.58	161.37	123.89	124.19	114.38	114.19	-11.01	-14.03	105.61	-7.22	-6.47	16.77	22.24	16.26	21.28	22.44	43.74	12.99

June 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 26.34 + 22.35 – 34.88
= 13.82

The cash conversion cycle of L3Harris Technologies Inc has shown some fluctuation over the past few quarters. The company's cash conversion cycle, which measures how long it takes for a company to convert its investments in inventory and other assets into cash flows from sales, stood at 13.82 days as of June 30, 2024, reflecting an increase compared to the previous quarter.

Looking back, the cash conversion cycle was significantly shorter in the most recent quarter compared to the drastic increase in the cycle during the fourth quarter of 2023. During that period, the cycle was at its highest at 139.58 days, indicating a substantial delay in the conversion of investments to cash.

In the first half of 2022, the cash conversion cycle was negative, suggesting a more efficient cash flow management. However, this improved performance was not sustained as the cycle turned positive again in subsequent quarters.

It is important for L3Harris Technologies Inc to closely monitor and manage its cash conversion cycle to ensure efficient operations and healthy cash flows. A shorter cycle indicates that the company is able to quickly convert its investments into cash, while a longer cycle implies potential challenges in managing working capital effectively. Analyzing the factors contributing to these fluctuations will be crucial for the company's financial performance and sustainability.