L3Harris Technologies Inc (LHX)
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 | 29.98 | 31.91 | 33.22 | 35.73 | 37.51 | 43.62 | 43.16 | 44.71 | 38.83 | 41.17 | 38.58 | 32.92 | 28.82 | 29.56 | 24.72 | 25.78 | 27.56 | 24.89 | 23.75 | 32.13 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 29.98 | 31.91 | 33.22 | 35.73 | 37.51 | 43.62 | 43.16 | 44.71 | 38.83 | 41.17 | 38.58 | 32.92 | 28.82 | 29.56 | 24.72 | 25.78 | 27.56 | 24.89 | 23.75 | 32.13 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 29.98 + — – —
= 29.98
The cash conversion cycle of L3Harris Technologies Inc has shown some fluctuations over the periods analyzed. The company's cash conversion cycle represents the number of days it takes to convert its resources invested in inventory and accounts receivable into cash inflows from sales.
Starting from March 31, 2020, the cycle stood at 32.13 days, indicating it took approximately a month to convert resources into cash inflows. Over the subsequent quarters, the cycle decreased to 23.75 days by June 30, 2020, and continued to improve to 24.89 days by September 30, 2020. This trend reversed slightly by December 31, 2020, with the cycle increasing to 27.56 days.
The company managed to bring down the cycle to 25.78 days by March 31, 2021, and further to 24.72 days by June 30, 2021. However, there was a slight increase in the cycle to 29.56 days by September 30, 2021, which decreased to 28.82 days by December 31, 2021.
The cycle fluctuated further over the following periods, reaching its highest point at 44.71 days by March 31, 2023. Thereafter, it decreased gradually to 29.98 days by December 31, 2024.
Analyzing these figures, it seems the company has made efforts to manage its working capital efficiently, aiming to reduce the time it takes to convert inventory and receivables into cash. However, the fluctuations observed suggest that the company may need to implement more consistent working capital management practices to optimize its cash conversion cycle effectively.
Peer comparison
Dec 31, 2024