Lennox International Inc (LII)

Activity ratios

Short-term

Turnover ratios

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
Inventory turnover 5.06 5.05 4.39 4.13 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
Receivables turnover 8.08 6.31 5.85 8.08 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
Payables turnover 7.28 7.29 7.56 7.76 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
Working capital turnover 9.36 10.00 7.60 10.66 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

Inventory Turnover Ratio:
The inventory turnover ratio for Lennox International Inc has shown fluctuation over the years. The ratio has generally been in the range of 4 to 6 times, indicating the company's efficiency in managing its inventory levels. A higher turnover ratio signifies that Lennox is selling its inventory more frequently within a given period.

Receivables Turnover Ratio:
Lennox's receivables turnover ratio has also varied over time, with values between 5 and 8 times. A higher receivables turnover indicates that the company is collecting its accounts receivable more frequently, which is a positive sign of effective credit management and faster cash conversion.

Payables Turnover Ratio:
The payables turnover ratio for Lennox International Inc has displayed some fluctuations but generally remains within the range of 6 to 9 times. This ratio reflects the company's ability to manage its outstanding payables effectively. A higher turnover ratio suggests that the company is paying its suppliers more rapidly.

Working Capital Turnover Ratio:
The working capital turnover ratio has shown significant variability for Lennox over the years. The ratio ranged from 6 to 56 times, indicating fluctuations in the company's efficiency in generating sales relative to its working capital. A higher turnover ratio suggests that Lennox is efficiently utilizing its working capital to generate revenue.

Average number of days

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 72.07 72.29 83.15 88.43 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
Days of sales outstanding (DSO) days 45.18 57.86 62.44 45.15 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
Number of days of payables days 50.11 50.09 48.28 47.02 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

Lennox International Inc's activity ratios provide insights into how efficiently the company manages its operations.

1. Days of Inventory on Hand (DOH): Lennox International's DOH has exhibited fluctuations over the years, ranging from a low of 54.60 days to a high of 96.17 days. A higher DOH indicates a longer time taken to convert inventory into sales, which may tie up capital and increase holding costs. The upward trend seen from March 31, 2023, to March 31, 2024, suggests potential inventory management challenges.

2. Days of Sales Outstanding (DSO): The DSO metric reflects the average number of days it takes for Lennox International to collect revenue after making a sale. The company's DSO has varied between 43.56 days and 64.86 days over the reported periods. Lower DSO values are desirable as they indicate faster collection of receivables. The decrease in DSO from September 30, 2023, to December 31, 2024, suggests an improvement in cash collection efficiency.

3. Number of Days of Payables: Lennox International's payables turnover, as indicated by the number of days of payables, has ranged from 36.66 days to 55.56 days. A lower number of days of payables implies that the company is paying its suppliers faster. The significant decrease in days of payables from September 30, 2023, to September 30, 2024, indicates a potential shift towards quicker settlement of payables.

Overall, while Lennox International Inc has experienced fluctuations in its activity ratios, management may need to focus on optimizing inventory levels, improving receivables collection, and balancing payables to enhance operational efficiency and cash flow management.

Long-term

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
Fixed asset turnover 6.68 6.82 6.78 6.56 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
Total asset turnover 1.54 1.55 1.56 1.67 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

Lennox International Inc's long-term activity ratios indicate how efficiently the company is utilizing its assets to generate sales.

The fixed asset turnover ratio shows how effectively the company is using its fixed assets to generate sales. From March 31, 2020, to December 31, 2024, the fixed asset turnover ratio ranged from a high of 8.82 to a low of 6.56. The ratios generally demonstrate a consistent efficiency in utilizing fixed assets, albeit with a slight decline towards the end of the period.

The total asset turnover ratio reveals how well the company is using all of its assets to generate revenue. Over the same period, this ratio ranged from a high of 1.95 to a low of 1.54. Generally, the company maintained a fairly stable total asset turnover ratio, with some fluctuations observed.

Overall, Lennox International Inc has shown relatively consistent efficiency in utilizing both fixed and total assets to generate sales over the analyzed period, with some minor variations in the ratios observed.