Lennox International Inc (LII)
Cash conversion cycle
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 74.31 | 80.04 | 62.04 | 61.83 | 72.82 |
| Days of sales outstanding (DSO) | days | 43.56 | 47.07 | 44.24 | 45.03 | 45.81 |
| Number of days of payables | days | 39.83 | 45.42 | 48.83 | 47.88 | 49.84 |
| Cash conversion cycle | days | 78.04 | 81.69 | 57.45 | 58.97 | 68.79 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 74.31 + 43.56 – 39.83
= 78.04
The cash conversion cycle of Lennox International Inc has fluctuated over the past five years. In 2023, the company's cash conversion cycle decreased to 78.04 days from 81.69 days in 2022. This indicates that Lennox International Inc improved its efficiency in managing its working capital and converting its resources into cash during the year.
Comparing to the previous years, the cash conversion cycle was relatively high in 2021 at 57.45 days, followed by 58.97 days in 2020 and 68.79 days in 2019. The lower the cash conversion cycle, the better the company is at managing its receivables, inventory, and payables to generate cash flow.
Overall, despite some fluctuations, Lennox International Inc has shown a generally positive trend in optimizing its cash conversion cycle, which is a crucial aspect of its financial performance and liquidity management. This suggests that the company has been more effective in converting its operating cycle into cash over the years.
Peer comparison
Dec 31, 2023