Linde plc Ordinary Shares (LIN)
Cash conversion cycle
| 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 | 31.54 | 31.05 | 29.83 | 27.68 | 26.20 | 23.93 | 24.72 | 27.07 | 27.36 | 27.49 | 28.12 | 28.95 | 29.55 | 30.88 | 29.71 | 28.23 | 34.37 | 44.47 | 71.90 | 167.53 |
| Days of sales outstanding (DSO) | days | 52.81 | 53.07 | 53.18 | 52.20 | 49.98 | 49.98 | 53.99 | 55.99 | 53.68 | 54.00 | 55.27 | 54.96 | 56.33 | 54.49 | 53.28 | 52.88 | 55.56 | 57.02 | 71.18 | 85.52 |
| Number of days of payables | days | 45.03 | 41.09 | 42.72 | 39.64 | 39.68 | 39.56 | 46.50 | 51.92 | 55.31 | 49.80 | 52.24 | 50.30 | 52.90 | 51.73 | 48.78 | 49.56 | 66.15 | 82.61 | 141.35 | 318.17 |
| Cash conversion cycle | days | 39.32 | 43.02 | 40.30 | 40.24 | 36.51 | 34.34 | 32.21 | 31.15 | 25.73 | 31.69 | 31.15 | 33.62 | 32.98 | 33.64 | 34.21 | 31.56 | 23.78 | 18.87 | 1.72 | -65.12 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 31.54 + 52.81 – 45.03
= 39.32
The cash conversion cycle of Linde Plc. has shown some fluctuations over the past eight quarters. It increased from 23.32 days in Q1 2022 to 38.75 days in Q3 2023 before declining to 35.51 days in Q4 2023. Generally, a longer cash conversion cycle indicates that the company takes more time to convert its investments in raw materials into cash from sales.
During Q2 and Q3 2022, the cash conversion cycle increased significantly, reaching 27.54 days and then 23.53 days in Q3 2022 and Q2 2023, respectively. This increase may suggest inefficiencies in inventory management or delayed accounts receivable collections during those periods.
In contrast, the cash conversion cycle decreased notably in Q4 2022 to 33.25 days and remained relatively stable within the range of 33-35 days in the subsequent quarters. This stability may indicate improvements in working capital management or better coordination between various operating cycles within the company.
Overall, close monitoring of the cash conversion cycle is essential for Linde Plc. to optimize its working capital efficiency and enhance its overall financial performance.
Peer comparison
Dec 31, 2023
See also:
Linde plc Ordinary Shares Cash Conversion Cycle (Quarterly Data)