Lam Research Corp (LRCX)

Cash conversion cycle

		Jun 30, 2024	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020
Days of inventory on hand (DOH)	days	168.40	160.58	136.90	109.58	108.58
Days of sales outstanding (DSO)	days	61.71	59.79	92.39	76.66	77.60
Number of days of payables	days	24.51	15.69	34.90	33.81	33.85
Cash conversion cycle	days	205.60	204.68	194.39	152.43	152.33

June 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 168.40 + 61.71 – 24.51
= 205.60

The cash conversion cycle of Lam Research Corp has shown fluctuating trends over the past five years. In Jun 30, 2024, the company's cash conversion cycle increased to 205.60 days compared to the previous year, indicating that it took longer for the company to convert its investments in inventory into cash from sales during that period. This suggests that the company may have faced challenges in managing its working capital efficiently.

In Jun 30, 2023, the cash conversion cycle was slightly lower at 204.68 days, but still higher compared to Jun 30, 2022 when it stood at 194.39 days. This indicates that there was some improvement in managing the company's working capital efficiency in 2023 compared to 2022.

In Jun 30, 2021 and Jun 30, 2020, the cash conversion cycle remained relatively stable at around 152 days, suggesting that Lam Research Corp was more efficient in converting its investments in inventory into cash during those years.

Overall, Lam Research Corp's cash conversion cycle has displayed some fluctuations over the years, pointing to potential challenges in managing working capital efficiently. It would be beneficial for the company to further analyze the factors contributing to these fluctuations and focus on optimizing its cash conversion cycle to enhance its overall financial performance.