Telefonaktiebolaget L M Ericsson (OTCPK:ERIXF) Cash Conversion Cycle Explanation
Generally, the lower this number is, the better for the company. Although it should be combined with other metrics (such as ROE % and ROA %), it can be especially useful for comparing close competitors, because the company with the lowest CCC is often the one with better management.
Be Aware
CCC is most effective with retail-type companies, which have inventories that are sold to customers. Consulting businesses, software companies and insurance companies are all examples of companies for whom this metric is meaningless.
The CCC is one of several tools that can help you evaluate management, especially if it is calculated for several consecutive time periods and for several competitors. Decreasing or steady CCCs are good, while rising ones should motivate you to dig a bit deeper.
Telefonaktiebolaget L M Ericsson Cash Conversion Cycle Related Terms
Telefonaktiebolaget L M Ericsson Cash Conversion Cycle Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Telefonaktiebolaget L M Ericsson Cash Conversion Cycle Chart
ERIXF vs CSCO, CIEN, MSI: Cash Conversion Cycle Comparison
For the Communication Equipment subindustry, Telefonaktiebolaget L M Ericsson's Cash Conversion Cycle, along with its competitors' market caps and Cash Conversion Cycle data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Telefonaktiebolaget L M Ericsson Cash Conversion Cycle vs Hardware Industry
For the Hardware industry and Technology sector, Telefonaktiebolaget L M Ericsson's Cash Conversion Cycle distribution charts can be found below:
* The bar in red indicates where Telefonaktiebolaget L M Ericsson's Cash Conversion Cycle falls into.
Telefonaktiebolaget L M Ericsson Cash Conversion Cycle Calculation
Cash Conversion Cycle (CCC) measures how fast a company can convert cash on hand into even more cash on hand. This metric looks at the amount of time needed to sell inventory, the amount of time needed to collect receivables and the length of time the company is afforded to pay its bills without incurring penalties.
Cash Conversion Cycle is one of several measures of management effectiveness.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Telefonaktiebolaget L M Ericsson (ERIXF) has a Cash Conversion Cycle of 66.98 as of Mar. 2026. Cash conversion cycle equals sum of days inventory and days sales outstanding less days payable. View historical data on Telefonaktiebolaget L M Ericsson and its competitors.
Is Telefonaktiebolaget L M Ericsson's Cash Conversion Cycle too high?
Telefonaktiebolaget L M Ericsson's current Cash Conversion Cycle is 66.98. The Hardware industry median Cash Conversion Cycle is 98.95. Telefonaktiebolaget L M Ericsson's value of 66.98 is 32.3% below this industry median. Overall, Telefonaktiebolaget L M Ericsson has a GF Score™ of 59/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Telefonaktiebolaget L M Ericsson's Cash Conversion Cycle compare to CSCO and CIEN?
Telefonaktiebolaget L M Ericsson's Cash Conversion Cycle of 66.98 can be compared against companies in the Hardware industry. The industry median Cash Conversion Cycle is 98.95. Telefonaktiebolaget L M Ericsson's value of 66.98 is 32.3% below this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Cash Conversion Cycle for a Hardware company?
The median Cash Conversion Cycle among Hardware companies is 98.95, based on 2,475 companies in the industry. Companies in the top quartile (top 25%) have a Cash Conversion Cycle significantly above this median, while those in the bottom quartile fall well below. However, Cash Conversion Cycle should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Telefonaktiebolaget L M Ericsson's current Cash Conversion Cycle of 66.98 is 32.3% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Cash Conversion Cycle mean?
A high Cash Conversion Cycle can signal that a stock is expensive relative to its fundamentals. Cash conversion cycle equals sum of days inventory and days sales outstanding less days payable. View historical data on Telefonaktiebolaget L M Ericsson and its competitors. For the Hardware industry, the median Cash Conversion Cycle is 98.95 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Telefonaktiebolaget L M Ericsson's current Cash Conversion Cycle is 66.98. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Telefonaktiebolaget L M Ericsson stock overvalued right now?
Based on GuruFocus' analysis, Telefonaktiebolaget L M Ericsson (ERIXF) is currently considered Significantly Overvalued. The stock's GF Value™ is $7.38, compared to a current price of $10.91 — trading 47.8% above its estimated fair value. The current Cash Conversion Cycle is 66.98 and 32.3% below the Hardware industry median of 98.95. Telefonaktiebolaget L M Ericsson's overall GF Score™ is 59/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Cash Conversion Cycle calculated?
Cash Conversion Cycle is calculated from a company's financial statements. For Telefonaktiebolaget L M Ericsson (ERIXF), the current Cash Conversion Cycle is 66.98 as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Telefonaktiebolaget L M Ericsson (ERIXF) Overvalued in 2026?
Based on GuruFocus' analysis, Telefonaktiebolaget L M Ericsson stock appears to be overvalued.
The current stock price of $10.91 is trading 47.8% above its estimated GF Value™ of $7.38.
GuruFocus considers Telefonaktiebolaget L M Ericsson to be Significantly Overvalued.
Key valuation signals for ERIXF:
Cash Conversion Cycle: 66.98
GF Value™: $7.38 vs. price of $10.91 (47.8% above fair value)
Industry Position: 32.3% below the Hardware median
No single metric tells the full story. See the ERIXF stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Telefonaktiebolaget L M Ericsson Business Description
Ericsson is a networking equipment and software provider, primarily selling mobile networking equipment and services to wireless service providers. Ericsson operates in three segments: networks, cloud software and services, and enterprise. While large wireless carriers are its largest customers, Ericsson has expanded its offerings for large enterprises. These products and services include private 5G networking, contact centers as a service, and application performance interfaces. Ericsson aims to combine its 5G network expertise with cloud-native, as-a-service platforms offering a more comprehensive hardware and software package. Ericsson also monetizes its research and development investments by licensing patents to handset manufacturers.
59GF Score
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