Lam Research Corp (LRCX)

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	172.17	182.35	181.67	176.74	164.46	155.35	153.24	146.85	138.55	125.22	112.78	109.96	111.07	115.28	117.29	114.48	110.27	101.30	91.36	88.84
Days of sales outstanding (DSO)	days	61.71	57.23	69.94	65.61	59.79	63.81	78.78	93.62	92.39	81.67	76.07	79.76	76.66	78.50	90.27	77.86	77.60	84.76	78.99	63.85
Number of days of payables	days	25.06	22.43	20.49	19.66	16.07	19.15	29.23	38.61	35.32	36.24	34.95	32.07	34.27	34.37	36.08	35.48	34.38	30.17	27.06	24.90
Cash conversion cycle	days	208.82	217.16	231.12	222.69	208.18	200.01	202.79	201.86	195.62	170.65	153.90	157.65	153.46	159.41	171.48	156.86	153.49	155.88	143.29	127.79

June 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 172.17 + 61.71 – 25.06
= 208.82

The cash conversion cycle for Lam Research Corp has shown fluctuations over the past five years. The cycle is a measure of how quickly the company can convert its investments in inventory and other resources into cash inflows from sales.

In the most recent quarter, ending June 30, 2024, the cash conversion cycle was 208.82 days, indicating that on average, it takes the company approximately 209 days to convert its investments into cash receipts. This represents a slight improvement from the previous quarter's cycle of 217.16 days.

Looking at the trend over the past five years, we can see that the cash conversion cycle has been somewhat volatile, with periods of longer cycles followed by improvements. The cycle reached a peak of 231.12 days in December 2023 and has since trended downwards.

Analyzing the data, it appears that Lam Research Corp has been able to manage its working capital and operational efficiency to reduce the time it takes to convert investments into cash. A lower cash conversion cycle generally indicates improved liquidity and efficiency in managing inventory and receivables.

Overall, the company's ability to optimize its cash conversion cycle reflects positively on its operational effectiveness and financial performance, demonstrating a focus on managing resources efficiently to generate cash flows.