Leidos Holdings Inc (LDOS)

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	8.58	8.51	8.53	9.54	2.75
Days of sales outstanding (DSO)	days	57.43	59.58	58.16	63.43	57.05
Number of days of payables	days	20.36	21.73	21.55	25.27	22.64
Cash conversion cycle	days	45.64	46.36	45.15	47.70	37.17

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 8.58 + 57.43 – 20.36
= 45.64

The cash conversion cycle for Leidos Holdings Inc has shown some fluctuations over the past five years. In 2023, the company's cash conversion cycle was 45.64 days, a slight improvement from the previous year's 46.36 days. This indicates that the company took less time to convert its investments in inventory and accounts receivable into cash in 2023.

Compared to 2021 and 2020, where the cash conversion cycle was 45.15 days and 47.70 days respectively, 2023's performance seems relatively stable. However, it is worth noting that in 2019, the company had a significantly lower cash conversion cycle of 37.17 days, suggesting a more efficient cash management process that year.

Overall, Leidos Holdings Inc's cash conversion cycle has experienced some variability in recent years, but the company appears to have maintained a relatively stable performance in converting its operating investments into cash in 2023. Monitoring this cycle can provide insights into the company's efficiency in managing its working capital and liquidity.