Lockheed Martin Corporation (LMT)
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 | 19.78 | 19.35 | 19.54 | 18.77 | 22.80 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 19.78 | 19.35 | 19.54 | 18.77 | 22.80 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 19.78 + — – —
= 19.78
Lockheed Martin Corporation's cash conversion cycle has shown a trend of improvement over the past five years. The cash conversion cycle decreased from 22.80 days as of December 31, 2020, to 18.77 days as of December 31, 2021. Despite a slight increase to 19.54 days as of December 31, 2022, the cycle remained relatively stable around the range of 19 days over the subsequent years. A lower cash conversion cycle indicates that Lockheed Martin is able to convert its investments in inventory and accounts receivable into cash more quickly.
Overall, the company's efficient management of its operating cycle suggests effectiveness in managing its working capital and liquidity. A shorter cash conversion cycle can indicate better cash flow management and operational efficiency, allowing Lockheed Martin to optimize its working capital and potentially improve its overall financial performance.