Leidos Holdings Inc (LDOS)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 8.29 | 8.58 | 8.51 | 8.53 | 9.54 |
| Days of sales outstanding (DSO) | days | 57.94 | 57.43 | 59.58 | 58.16 | 63.43 |
| Number of days of payables | days | 18.56 | 20.36 | 21.73 | 21.55 | 25.27 |
| Cash conversion cycle | days | 47.67 | 45.64 | 46.36 | 45.15 | 47.70 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 8.29 + 57.94 – 18.56
= 47.67
The cash conversion cycle of Leidos Holdings Inc has shown a relatively stable trend over the years, ranging from 45.15 days to 47.70 days. The cycle represents the time it takes for the company to convert its investments in inventory into cash receipts from customers. A lower cash conversion cycle signifies a more efficient management of working capital as the company is able to collect cash faster.
In 2021, the cash conversion cycle improved to 45.15 days, indicating that Leidos Holdings Inc was able to enhance its working capital management, possibly by reducing the time it takes to sell inventory or collect receivables. However, in subsequent years, the cycle slightly increased before stabilizing around 46-47 days, which could suggest changes in the company's operational efficiency or working capital practices.
Overall, the company's cash conversion cycle remains within a reasonable range, but management may seek opportunities to further optimize working capital processes to potentially shorten the cycle and improve cash flow performance in the future.
Peer comparison
Dec 31, 2024