Lockheed Martin Corp. (NYSE:LMT)

Inventory Turnover

The inventory turnover ratio exhibited fluctuations over the observed periods. Initially increasing from 17.58 to a peak of 19.81 within the first three quarters of 2021, it then declined to 16.2 in mid-2022 before generally recovering and reaching a high of 20.21 in mid-2024. Towards the end of the data range, a moderate downward adjustment is seen, stabilizing around 18.0. This suggests periods of varying efficiency in inventory management, with recent years showing improved turnover followed by slight moderation.

Receivables Turnover

This ratio shows considerable volatility, with peaks and troughs throughout the timeline. After an initial drop from 29.81 in early 2021 to 18.87 by mid-2022, it rose again towards the end of 2023, peaking over 35.4 in late 2025. The oscillations indicate a variable collection effectiveness, possibly reflecting changes in credit policy or customer payment behavior. The extremes suggest alternating periods of rapid and slower receivables collection cycles.

Payables Turnover

The payables turnover ratio demonstrated pronounced volatility. A notable spike up to 74.34 was observed in late 2021, followed by a sharp decline to values in the range of approximately 15 to 30 in subsequent periods. This irregular pattern could signal inconsistent payment timing to suppliers, with some quarters showing accelerated payments and others lengthened payment periods. The variability points to fluctuating supplier payment strategies or cash management approaches.

Working Capital Turnover

The working capital turnover ratio varied markedly, beginning near 12 in early 2021, climbing steadily, and experiencing a substantial surge to 29.25 and then 44.49 by mid-2025. Some missing data occurs in the late 2025 periods. The upward trajectory suggests enhanced effectiveness in utilizing working capital to generate revenues, although the sharp increases may reflect one-off changes or operational shifts. Overall, a trend toward improving working capital efficiency is evident.

Average Inventory Processing Period

The average number of days to process inventory remained relatively stable throughout the period, oscillating narrowly between 18 and 23 days. This stability indicates consistent inventory turnover and supply chain management practices without significant seasonal or operational disruptions.

Average Receivable Collection Period

The average days to collect receivables showed variability, ranging from around 10 to 19 days. There is a tendency towards increases in some quarters, such as mid-2022 and late 2025, signaling occasional slowdowns in collections. However, the period generally maintains a timeframe close to two weeks for receivable collections.

Operating Cycle

The operating cycle duration displayed fluctuations but remained mostly within a 30 to 42-day range. Some lengthening occurs mid to late 2022 and again near the end of 2025, suggesting intermittent delays or extensions in the overall cash-to-cash cycle. Otherwise, the operating cycle appears relatively steady across most quarters.

Average Payables Payment Period

The average payables payment period experienced significant shifts, from as low as 5 days in late 2021 to as high as 24 days in late 2023. This variation indicates changes in payment timing, alternating between prompt supplier payments and extended payment terms. This could reflect strategic cash management decisions or differing supplier agreements over time.

Cash Conversion Cycle

The cash conversion cycle generally fluctuated between 8 and 27 days, with some lower points around 8 to 11 days occurring in mid to late 2025. This relative range suggests continual efforts to optimize the balance between inventory, receivables, and payables, with the recent shorter cycles potentially indicating improved liquidity and operational efficiency.

Operating Costs and Expenses

The operating costs and expenses exhibit noticeable fluctuations over the observed periods. Initially, there is a rise from 14,072 million USD to a peak of 15,307 million USD within the first year. Subsequently, a decline occurs reaching a low of 13,055 million USD by March 27, 2022. From this point, the expenses trend upward again, with significant increases reaching as high as 17,932 million USD by December 31, 2024. Despite some intermittent decreases, the overall trajectory indicates an increasing cost structure in the later periods, suggesting potentially escalating operational activities or inflationary pressures impacting expenses.

Inventories

Inventory levels demonstrate a moderate upward trend across the timeframe. Starting from approximately 3,256 million USD, inventories experience some volatility with periods of increase and decrease but generally move higher, reaching around 3,749 million USD by September 28, 2025. This rising inventory level may reflect stockpiling strategies or increased production outputs anticipating future demand.

Inventory Turnover Ratio

The inventory turnover ratio shows variability but remains within a relatively consistent range between approximately 16.2 and 20.21. The ratio peaks at 20.21 during June 30, 2024, indicating a period of more efficient inventory management or faster sales relative to inventory. Conversely, lower values near 16.2, observed around June 26, 2022, suggest slower inventory movement at those times. The general stability of this ratio over time suggests consistent efficiency in managing inventory relative to cost of goods sold, despite fluctuations in absolute inventory and expense values.

Summary of Trends

Overall, the financial data indicate an expanding operational scale with rising operating costs and inventories. Inventory management efficiency remains stable, as reflected in the relatively steady inventory turnover ratio. The growth in operating expenses may require monitoring to ensure it aligns with revenue growth and profitability objectives. The increasing inventory levels alongside stable turnover ratios suggest that inventory is being managed effectively in proportion to sales activity.

The analysis of the quarterly financial data reveals several key trends related to sales, receivables, and receivables turnover over the examined periods.

Sales

Sales figures demonstrate a fluctuating yet generally upward trend with some volatility across the quarters. Initially, sales increased from $16,258 million in the first quarter of 2021 to a peak of $18,991 million at the end of 2022. However, there is a notable decline following that peak, with sales falling to $15,126 million in the first quarter of 2023 before recovering again. The data shows repeated quarterly fluctuations, but the overall sales figures for 2024 and 2025 exhibit a positive trajectory, with amounts consistently hovering around $17,000 to $18,600 million, indicating ongoing strength and some resilience in revenue generation despite intermediate dips.

Receivables, net

Net receivables show a pattern of significant variation over the periods, which does not consistently correlate with sales trends. There are peaks observed in the second and third quarters of multiple years, such as $3,401 million in the second quarter of 2022 and similar high points in 2023 and 2025. Conversely, some quarters report substantially lower receivables, for example, $1,963 million at the end of 2021 and values around $2,000 million in some 2024 and 2025 quarters. This volatility suggests variable collection cycles or changes in customer payment behavior, potentially impacting liquidity.

Receivables Turnover

The receivables turnover ratio also fluctuates notably, reflecting changing efficiency in collections. The ratio exhibits highs exceeding 30 times per year in several quarters, such as 34.15 at the end of 2021, 31.69 in the last quarter of 2023, and 35.48 in the third quarter of 2025, indicating periods of strong collection performance. Conversely, lower turnover ratios, such as 18.87 in the second quarter of 2022 and 19.08 in the third quarter of 2025, imply slower collections during those times. The oscillations in turnover ratios suggest unstable collection periods possibly influenced by external market or client-specific factors.

Overall, the data indicates a business with strong but somewhat uneven sales performance accompanied by varying effectiveness in managing accounts receivable. This inconsistency in receivables and turnover presents areas for potential operational improvement, particularly in receivables management to achieve more predictable cash flow cycles.

Operating Costs and Expenses

The operating costs and expenses show a pattern of fluctuation across the quarters. There is notable volatility with values oscillating between approximately $13,000 million and $18,000 million. Notably, spikes occur at the end of calendar years, particularly in Decembers 2021, 2022, and 2024, indicating a seasonal or end-of-year increase in expenses. Mid-year quarters frequently show lower expense levels, although this is not uniform each year. The overall trend does not demonstrate consistent growth or decline but suggests periodic increases with some volatility in expenses over the examined periods.

Accounts Payable

Accounts payable figures also fluctuate substantially over the quarters. Initial quarters show relatively moderate values around $1,500 to $2,500 million, but there are significant increases in certain periods, such as March 2023 and September 2025, when payables exceed $3,800 million. These peaks are often followed by decreases in subsequent quarters. There is no clear upward or downward trend; instead, payable amounts vary quarter to quarter, possibly reflecting changes in payment cycles, supplier terms, or purchasing activity.

Payables Turnover Ratio

The payables turnover ratio shows a high degree of variability, ranging from lows near 15 to highs above 74 in some quarters. A particularly high spike is observed in December 2021 with a ratio of 74.34, indicating a rapid payment cycle during that period. In contrast, multiple subsequent quarters show lower turnover values, often in the range of 15 to 28, suggesting a slower payment pace or lengthened credit terms. Periods of high payables and lower turnover ratio seem to coincide with quarters where accounts payable are elevated, reflecting slower payment activity. Overall, the ratio does not exhibit a steady trend but fluctuates in response to changes in payable balances and payment practices.

Summary

The financial data across the analyzed quarters demonstrate fluctuating operating expenses paired with variable accounts payable balances and consequently inconsistent payables turnover. Seasonal trends appear evident in operating costs, with higher expenses typically recorded at year-end. Accounts payable and turnover ratios do not display consistent directional movement, suggesting dynamic and possibly cyclical payment and purchasing behaviors. These patterns highlight the importance of monitoring cash flow management and expense control mechanisms to maintain operational efficiency over time.

Working Capital

The working capital has demonstrated volatility over the reported periods. Initially, it decreased from 5,535 million USD in March 2021 to a low of 4,343 million USD in March 2022, followed by a moderate recovery reaching 6,383 million USD by June 2023. Subsequent quarters exhibited a significant decline, reaching negative territory at -366 million USD in September 2025, before rebounding to 2,962 million USD by the last reported period. This fluctuation indicates varying liquidity conditions, with occasional strains on short-term financial stability, especially noticeable towards late 2024 and mid-2025.

Sales

Sales figures showed an overall upward trend with some periodic fluctuations. Starting at 16,258 million USD in March 2021, sales increased and peaked at 18,991 million USD by December 2021. Thereafter, sales experienced multiple ups and downs, including a notable dip to 14,964 million USD in March 2022, but recovered subsequently. The highest figures were observed around December 2023 and onwards, maintaining sales above 17,000 million USD and approaching 18,609 million USD by the final period. This pattern suggests a resilient revenue base with cyclical variations but generally sustained growth over the span.

Working Capital Turnover

Working capital turnover exhibited significant fluctuations throughout the periods. Initial values hovered near 12, decreasing slightly to around 10 in late 2021 and early 2022. From 2022 onward, the turnover ratio exhibited notable spikes, for example, a sharp increase to 18.85 in December 2023 and an extraordinary peak reaching 44.49 (though later data for this specific point are missing). The ratio's increase tends to inversely correlate with the decreases in working capital, suggesting higher efficiency in sales generation relative to working capital during tight liquidity periods. The exceptional peaks imply either a substantial reduction in working capital or exceptional sales volumes in those periods, reflecting dynamic operational efficiency and capital management strategies.

Overall Insights

The data reveal cyclical yet generally positive sales trends, contrasted by significant variability in working capital levels, including episodes of negative working capital. The inverse movement between working capital and its turnover ratio highlights periods where the company either intensively managed short-term assets and liabilities or possibly faced liquidity challenges. The sharp fluctuations in the working capital turnover ratio could imply strategic shifts or external factors influencing capital efficiency. Continued monitoring of liquidity and turnover ratios will be critical to ensuring operational stability given the observed variability.

Inventory Turnover

The inventory turnover ratio demonstrates fluctuating trends over the reported periods. Starting at 17.58, it increased to a peak of 19.81 in September 2021, reflecting an improvement in inventory management efficiency. There was a subsequent decrease to 16.20 by June 2022, indicating a possible slowdown in the rate at which inventory was sold or used. Afterwards, the ratio rose again, reaching 18.87 by the end of 2023 and peaking at 20.21 in June 2024, which suggests heightened operational activity or better inventory control. Towards the latest periods, the ratio slightly declined but maintained levels around 17.9 to 18.0, indicating a stabilization in turnover rates.

Average Inventory Processing Period

The average inventory processing period generally inversely correlates with the inventory turnover ratio, as expected. It started at 21 days in March 2021 and showed a gradual improvement, dropping to 18 days in September 2021. There was a period of slight elongation, with days increasing to 23 in June 2022, coinciding with the decrease in inventory turnover. Following this, the period mostly settled around 19 to 20 days, with a brief improvement to 18 days in September 2024. The processing period then stabilized at approximately 20 days towards the end of the timeline, suggesting consistent inventory processing timeframes.

Overall Insights

The data indicates that inventory management experienced periods of both acceleration and deceleration over the reported quarters. The peak inventory turnover values align with shortened average processing periods, reflecting efficient inventory cycles. Conversely, periods of lower turnover are associated with slightly increased days in inventory processing, possibly indicating slower sales or operational delays. The recent stabilization of both ratios suggests the company has attained a balanced inventory management approach, maintaining steady operational efficiency in inventory handling.

Receivables Turnover

The receivables turnover ratio exhibits notable fluctuations over the observed periods. Beginning at a relatively high level of 29.81, the ratio declines to a low of 18.87 by mid-2022. Subsequently, it recovers, reaching peaks above 30 in several quarters, such as 31.69 and 33.3, before again declining towards the final periods, ending near 19.08. This pattern suggests variability in the efficiency of credit and collection policies, with periods of improved asset turnover alternating with downturns.

Average Receivable Collection Period

The average collection period in days inversely mirrors trends observed in the receivables turnover. Early on, the collection period remains low and stable around 11 to 14 days, then rises to a peak of 19 days coinciding with the lowest turnover ratio. Throughout the timeline, the collection period oscillates between approximately 10 and 19 days, indicating some inconsistency in collections efficiency. Lower days in later periods correspond with higher turnover ratios, reflecting more rapid collections.

Overall Insights

The interplay between the receivables turnover ratio and the average collection period highlights variable performance in the company’s credit management. Quarters with a high turnover ratio align with shorter collection cycles, which is indicative of strong collection practices and possibly stricter credit policies. Conversely, periods with lower turnover and higher collection days suggest delays or easing in credit terms. The absence of a clear upward or downward long-term trend indicates episodic rather than sustained changes in receivables management efficiency during the timeframe analyzed.

Inventory Processing Period

The average inventory processing period demonstrates relative stability with moderate fluctuations over the observed quarters. Starting from 21 days, the metric experienced a slight decrease reaching 18 days at one point, followed by oscillations typically between 18 and 23 days. The general trend indicates a consistent ability to manage inventory turnover within a range of approximately 18 to 23 days without abrupt variations.

Receivable Collection Period

The average receivable collection period exhibits more pronounced variability across quarters. Initial values indicate a range around 11 to 14 days, which then escalates to peaks as high as 19 days in multiple periods. This suggests intermittent delays or slower collection cycles in certain quarters, accompanied by periods of recovery to lower collection durations. The pattern reflects some challenges in maintaining consistent receivables management efficiency over time.

Operating Cycle

The operating cycle, being the sum of inventory processing and receivable collection periods, mirrors the combined effects of the aforementioned components. There is a noticeable increase from approximately 30 days early on to peaks around 42 days in some quarters, followed by partial normalization. The cyclical behavior points toward fluctuations in overall working capital management, influenced principally by variations in receivable collections paired with relatively steady inventory turnover.

Overall Insights

The data reveals a generally stable inventory management process alongside a more volatile accounts receivable cycle. The longer and less consistent receivable collection periods have contributed to expanded operating cycles in certain quarters, potentially impacting liquidity and operational efficiency. Maintaining focus on receivables could enhance working capital performance and reduce cash conversion cycles.

Payables Turnover Ratio

The payables turnover ratio exhibited considerable fluctuations over the periods under review. Initially, there was an increasing trend from 30.31 to a peak of 74.34, indicating a faster rate of paying off suppliers early in the timeline. Subsequently, the ratio declined sharply to values generally ranging between approximately 16 and 29, with notable variation quarter to quarter, suggesting a slowdown in payment velocity. This volatility suggests changes in payment policies or operational pressures affecting payable cycles.

Average Payables Payment Period

The average payables payment period showed an inverse pattern relative to the payables turnover ratio. Early in the period, the payment days decreased from 12 to 5 days, reflecting a short payment cycle. However, this was followed by a lengthening trend with the payment period increasing up to 24 days. In later periods, the days oscillated between roughly 13 and 22, showing less consistent payment timing. These increases denote a trend toward slower payments to suppliers during later quarters.

Overall Trends and Insights

An inverse relationship between payables turnover and payment period is evident, consistent with accounting principles where a higher turnover corresponds to faster payments and vice versa. The initial quarters show aggressive payable management with quick settlements, which gradually gave way to more extended payment periods in subsequent quarters. The variability and fluctuations across quarters may reflect strategic shifts in working capital management, changes in credit terms with suppliers, or external economic factors impacting cash flows and payment behavior.

The analysis of the financial operating cycle metrics over the reported periods reveals several noteworthy trends in the company’s working capital management.

Average Inventory Processing Period

The inventory processing period remained relatively stable, fluctuating mildly mostly between 18 and 22 days across the quarters. There was a minor increase observed in mid-2022, reaching up to 23 days, but this did not persist in subsequent quarters where the measure reverted to around 20 days. This stability indicates consistent inventory turnover rates without significant delays in processing.

Average Receivable Collection Period

The receivable collection period demonstrated more variability compared to inventory processing. Starting from about 12 days in early 2021, it saw peaks reaching 19 days notably in mid-2022, mid-2023, and again towards late 2025. These spikes suggest occasional delays in collecting payments from customers, which could affect cash inflows. However, the period generally oscillated between 10 and 17 days demonstrating some control over receivables management with intermittent fluctuations.

Average Payables Payment Period

The payables payment period showed significant variability and an overall increasing trend when comparing early 2021 and late 2025. Initially low, sometimes as short as 5 days, it increased to consistently above 20 days in multiple quarters especially from 2023 onward. This lengthening of payment terms indicates the company extended the time it takes to settle its obligations to suppliers, which can positively impact cash flow but may carry implications for supplier relationships.

Cash Conversion Cycle (CCC)

The cash conversion cycle exhibited fluctuations but trended towards a moderate reduction over the periods. Peaks near 27 days occurred mid-2022, followed by a trough as low as 8 to 9 days in late 2024 to 2025. This decline in CCC indicates improvement in the overall working capital efficiency, as the company managed to shorten the time between cash outflows and inflows, enhancing liquidity and operational efficiency.

In summary, the company maintained a consistent inventory turnover period while experiencing variability in both receivables and payables periods. The lengthening of payables coupled with fluctuating receivables impacted the cash conversion cycle, which has shown signs of improvement in recent periods reflecting more efficient working capital management practices.