Lumentum Holdings Inc (LITE)
Cash conversion cycle
| 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 | Dec 31, 2019 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 114.77 | 94.28 | 110.21 | 96.49 | 86.81 | 90.49 | 84.31 | 93.46 | 71.48 | 65.01 | 60.90 | 60.48 | 56.30 | 74.43 | 70.86 | 71.20 | 61.76 | 46.37 | 47.93 | 58.49 |
| Days of sales outstanding (DSO) | days | 0.78 | 1.31 | 1.87 | 1.89 | 1.41 | — | 1.09 | — | 0.87 | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | 36.38 | 29.89 | 38.08 | 30.34 | 35.99 | 43.83 | 47.24 | 52.50 | 44.79 | 36.80 | 34.59 | 29.69 | 33.51 | 36.99 | 38.08 | 48.89 | 49.30 | 38.82 | 38.35 | 44.03 |
| Cash conversion cycle | days | 79.17 | 65.69 | 73.99 | 68.03 | 52.23 | 46.66 | 38.15 | 40.96 | 27.56 | 28.21 | 26.31 | 30.80 | 22.79 | 37.45 | 32.78 | 22.30 | 12.46 | 7.54 | 9.58 | 14.46 |
June 30, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 114.77 + 0.78 – 36.38
= 79.17
The cash conversion cycle of Lumentum Holdings Inc provides insights into the efficiency of its operational and financial activities. A lower cash conversion cycle indicates quicker conversion of investments in inventory and accounts receivable into cash, reflecting efficient management of working capital.
Analyzing the trend, the cash conversion cycle has displayed some fluctuations over the periods. The cycle increased from 14.46 days in December 2019 to 79.17 days in June 2024, indicating a significant extension in the conversion period. This increase suggests potential challenges in managing inventory or collecting accounts receivable efficiently.
While there were fluctuations in the cycle, the general trend shows an overall upward movement, peaking at 79.17 days in June 2024. This trend could raise concerns about the company's working capital management efficiency and its ability to convert investments into cash promptly.
It is essential for Lumentum Holdings Inc to monitor and improve its cash conversion cycle to ensure optimal utilization of resources and maintain healthy liquidity levels. Strategies to streamline operations, enhance inventory turnover, and accelerate accounts receivable collections could help in lowering the cash conversion cycle and improving overall financial performance.
Peer comparison
Jun 30, 2024