LKQ Corporation (LKQ)
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 | 134.41 | 137.40 | 132.67 | 122.69 | 125.27 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 134.41 | 137.40 | 132.67 | 122.69 | 125.27 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 134.41 + — – —
= 134.41
The cash conversion cycle of LKQ Corporation has shown variations over the past five years.
As of December 31, 2020, the cash conversion cycle stood at 125.27 days. Over the subsequent years, the cycle improved slightly to 122.69 days by December 31, 2021. However, in the following years, there was an upward trend in the cycle with figures of 132.67 days, 137.40 days, and 134.41 days as of December 31, 2022, 2023, and 2024 respectively.
This suggests that LKQ Corporation took longer to convert its investments in inventory into cash during these years, impacting its liquidity and operating efficiency. The increase in the cash conversion cycle could be attributed to various factors such as inventory management, accounts receivable collection, and accounts payable payment period.
Further analysis and management attention may be required to optimize the cash conversion cycle and improve the company's working capital management.