Lennox International Inc (LII)
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 | 72.07 | 74.31 | 80.04 | 62.04 | 61.83 |
| Days of sales outstanding (DSO) | days | 45.18 | 43.56 | 47.07 | 44.24 | 45.03 |
| Number of days of payables | days | 50.11 | 39.83 | 45.42 | 48.83 | 47.88 |
| Cash conversion cycle | days | 67.14 | 78.04 | 81.69 | 57.45 | 58.97 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 72.07 + 45.18 – 50.11
= 67.14
The cash conversion cycle of Lennox International Inc has shown some fluctuations over the past five years.
As of December 31, 2020, the cash conversion cycle was 58.97 days, indicating that on average, Lennox International takes approximately 58.97 days to convert its investments in inventory and other resources into cash flows.
By December 31, 2021, the cash conversion cycle improved slightly to 57.45 days, suggesting a more efficient management of working capital during that period.
However, there was a significant increase in the cash conversion cycle by December 31, 2022, reaching 81.69 days. This could indicate potential challenges in managing inventory, payables, and receivables effectively during that year.
By the end of December 31, 2023, the cash conversion cycle decreased to 78.04 days, but it remained higher compared to the levels seen in the previous years.
The most recent data as of December 31, 2024, shows a further improvement in the cash conversion cycle to 67.14 days. This suggests that Lennox International may have made efforts to streamline its working capital management processes.
Overall, the trend in the cash conversion cycle of Lennox International Inc indicates some fluctuations, with a general pattern of variability in the efficiency of its operations in turning investments into cash over the five-year period.
Peer comparison
Dec 31, 2024