Lennox International Inc (LII)

Activity ratios

Short-term

Turnover ratios

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Inventory turnover 4.91 4.60 3.99 3.80 4.56 4.49 4.60 4.53 5.88 6.36 6.69 5.40 5.90 6.34 5.19 4.41 5.01 4.63 4.29 4.58
Receivables turnover 8.38 7.08 5.69 7.40 7.75 6.48 5.63 7.09 8.25 7.14 5.98 7.35 8.11 6.64 5.74 7.59 7.97 6.05 5.24 7.64
Payables turnover 9.17 9.96 7.27 7.71 8.04 7.75 6.57 6.73 7.48 7.30 7.16 7.27 7.62 7.18 8.80 7.60 7.32 6.89 5.71 6.68
Working capital turnover 11.89 10.10 56.53 32.74 — 6.93 6.66 7.40 12.04 49.03 20.43 13.29 9.41 10.21 12.76 11.32 32.21 18.16 10.20 12.65

1. Inventory Turnover: Lennox International Inc's inventory turnover ratio measures the number of times the company sells and replaces its inventory in a given period. The trend shows slight fluctuations over the quarters, ranging from 3.80 to 4.91, with Q4 2023 showing the highest turnover at 4.91.

2. Receivables Turnover: This ratio reflects how efficiently Lennox International collects its receivables. The company has experienced varied turnover rates from 5.63 to 8.38 during the periods analyzed, with the highest turnover in Q4 2023 at 8.38.

3. Payables Turnover: Payables turnover ratio evaluates how effectively Lennox International pays its suppliers. The ratio fluctuates between 6.57 and 9.96 over the quarters, with Q3 2023 showing the highest turnover at 9.96.

4. Working Capital Turnover: This ratio measures how efficiently the company generates revenue relative to its working capital. Lennox International shows significant fluctuations in this ratio, with Q2 2023 and Q4 2023 displaying notably high turnover rates of 56.53 and 11.89, respectively.

Overall, the activity ratios indicate that Lennox International Inc has been managing its inventory, receivables, payables, and working capital efficiently, with some quarters showing better performance compared to others. Further analysis considering industry benchmarks would provide more insights into the company's operational efficiency.

Average number of days

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Days of inventory on hand (DOH) days 74.30 79.29 91.47 96.17 80.04 81.33 79.26 80.54 62.04 57.37 54.60 67.65 61.83 57.54 70.27 82.80 72.81 78.85 85.10 79.65
Days of sales outstanding (DSO) days 43.56 51.54 64.16 49.33 47.07 56.34 64.86 51.46 44.23 51.15 61.08 49.66 45.03 54.95 63.59 48.07 45.81 60.31 69.72 47.78
Number of days of payables days 39.82 36.66 50.23 47.34 45.42 47.10 55.56 54.25 48.83 49.97 50.96 50.22 47.88 50.82 41.49 48.05 49.84 52.94 63.95 54.67

Days of inventory on hand (DOH) measures the average number of days it takes for Lennox International Inc to sell its inventory. A decreasing trend can indicate efficient inventory management, as seen in Q3 2023 to Q4 2023. However, the DOH increased from Q1 2023 to Q2 2023 and then decreased slightly in Q3 2023, suggesting some fluctuations in inventory turnover.

Days of sales outstanding (DSO) reflects the average number of days it takes for Lennox to collect payment after making a sale. Lower DSO values indicate faster collection of receivables. There was a decrease in DSO from Q2 2023 to Q3 2023, which is a positive sign indicating improved efficiency in collecting payments from customers. However, DSO increased in Q4 2023 compared to the previous quarter.

Number of days of payables shows the average number of days it takes for Lennox to pay its suppliers. A higher value suggests Lennox takes longer to pay its bills. The trend in payables days shows some inconsistency, as it fluctuated throughout the quarters. Q2 2023 had the highest number of days of payables, indicating a longer period to settle its outstanding payables.

In summary, Lennox International Inc's activity ratios reflect some variation in inventory management, collection, and payment practices over the quarters. Monitoring these ratios can provide insights into the company's operational efficiency and working capital management.

Long-term

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Fixed asset turnover 6.92 8.17 7.89 8.38 8.60 8.82 8.48 8.25 8.14 8.63 8.69 8.23 7.83 8.10 8.12 8.46 8.55 8.99 9.00 9.33
Total asset turnover 1.78 1.70 1.61 1.72 1.84 1.75 1.66 1.74 1.93 1.95 1.88 1.85 1.79 1.82 1.69 1.76 1.87 1.70 1.61 1.82

Lennox International Inc's fixed asset turnover ratio has been relatively stable over the past eight quarters, ranging from 6.92 to 8.60. This indicates that the company generates between 6.92 to 8.60 in revenue for every dollar invested in fixed assets. A higher fixed asset turnover ratio is generally considered favorable as it signifies higher efficiency in utilizing fixed assets to generate sales.

On the other hand, Lennox International Inc's total asset turnover ratio has fluctuated more significantly, with values ranging from 1.61 to 1.84. This ratio reflects the company's ability to generate sales in relation to its total assets. Generally, a higher total asset turnover ratio suggests that the company is effectively utilizing its assets to generate revenue. However, a fluctuating total asset turnover ratio may indicate varying levels of efficiency in asset utilization over the quarters.

Overall, while Lennox International Inc's fixed asset turnover ratio has been relatively consistent, its total asset turnover ratio has shown more variability. Further analysis and comparison with industry benchmarks would be beneficial to fully assess the company's long-term activity performance.