LCI Industries (LCII)

Cash conversion cycle

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	93.22	95.54	116.63	86.25	78.41
Days of sales outstanding (DSO)	days	20.71	15.02	26.10	35.07	30.78
Number of days of payables	days	22.29	13.32	30.03	32.30	19.77
Cash conversion cycle	days	91.64	97.24	112.70	89.02	89.41

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 93.22 + 20.71 – 22.29
= 91.64

The cash conversion cycle of LCI Industries has shown fluctuations over the past five years. In 2023, the company's cash conversion cycle decreased to 91.64 days from 97.24 days in 2022. This signifies an improvement in managing its cash, inventory, and receivables during the most recent year.

Comparatively, the cycle was longer in 2021 at 112.70 days, indicating that the company took longer to convert its investments in inventory and receivables into cash during that period. In 2020 and 2019, the cash conversion cycle was relatively stable, hovering around 89-90 days.

Overall, a shorter cash conversion cycle is generally considered favorable as it indicates that the company is efficiently managing its working capital and turning its assets into cash quickly. The recent decrease in the cash conversion cycle for LCI Industries suggests an improvement in its operational efficiency and liquidity management in 2023.