Lockheed Martin Corporation (LMT)

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 19.35 20.42 21.70 21.95 19.54 20.18 22.53 20.14 18.77 18.43 19.59 20.76 22.80 21.59 23.61 24.44 25.68 25.28 26.57 24.64
Days of sales outstanding (DSO) days 11.52 12.97 18.56 14.25 13.86 14.01 19.35 14.03 10.69 12.47 14.26 12.24 11.04 14.09 16.45 17.27 14.26 14.91 16.16 18.31
Number of days of payables days 14.28 23.53 21.50 20.68 13.39 16.99 15.16 16.65 4.91 9.65 10.10 12.04 5.66 9.77 9.74 21.86 9.09 21.13 19.27 23.23
Cash conversion cycle days 16.58 9.86 18.76 15.52 20.00 17.19 26.71 17.52 24.54 21.25 23.75 20.96 28.18 25.90 30.31 19.84 30.85 19.06 23.46 19.72

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 19.35 + 11.52 – 14.28
= 16.58

The cash conversion cycle (CCC) of Lockheed Martin Corp. has shown fluctuations over the past eight quarters. The CCC measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A lower CCC is generally more favorable as it indicates a shorter time for the company to receive cash from its investments.

Looking at the data, we can see that there have been fluctuations in the CCC over the period. The trend shows that the CCC decreased from 20.01 days in December 2022 to 9.85 days in September 2023, indicating an improvement in the company's ability to convert its investments into cash. However, there was a subsequent increase to 18.76 days in June 2023, followed by a decrease to 16.59 days in December 2023.

This fluctuation in the CCC may be indicative of changes in the company's inventory management, accounts receivable collection, and accounts payable management. A detailed analysis of the components contributing to the CCC, such as inventory turnover, accounts receivable turnover, and accounts payable turnover, could provide further insights into the company's cash management efficiency.

Overall, while the CCC of Lockheed Martin Corp. has shown fluctuations, it is essential to monitor trends in the CCC over time to assess the company's efficiency in managing its cash conversion cycle effectively.

See also:

Lockheed Martin Corporation Cash Conversion Cycle (Quarterly Data)