Leidos Holdings Inc (LDOS)

Cash conversion cycle

		Dec 31, 2024	Sep 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	8.32	8.74	8.71	8.58	8.29	8.88	8.74	8.51	8.61	8.72	8.59	8.53	8.51	8.08	8.96	9.54	10.32	10.73	—	2.75
Days of sales outstanding (DSO)	days	58.48	61.48	63.02	57.43	59.06	60.94	62.95	59.58	58.75	62.88	63.45	58.16	61.87	62.53	61.97	63.43	56.94	56.33	57.38	57.05
Number of days of payables	days	18.62	—	—	20.36	—	—	—	21.73	—	—	—	21.55	—	—	—	25.27	—	—	—	22.64
Cash conversion cycle	days	48.18	70.22	71.73	45.64	67.35	69.82	71.68	46.36	67.36	71.60	72.04	45.15	70.38	70.61	70.93	47.70	67.27	67.06	57.38	37.17

December 31, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 8.32 + 58.48 – 18.62
= 48.18

The cash conversion cycle of Leidos Holdings Inc has shown fluctuations over the period under review. A lower cash conversion cycle indicates that the company is able to convert its investments in inventory and other resources back into cash more quickly.

From December 31, 2019, to September 30, 2023, there was a general increasing trend in the cash conversion cycle, peaking at 72.04 days on March 31, 2022. This trend indicates a possible inefficiency in managing its working capital during that period. However, there was a slight decrease in the cash conversion cycle from December 31, 2022, to December 31, 2024, with the cycle standing at 48.18 days as of December 31, 2024.

Overall, Leidos Holdings Inc should aim to effectively manage its accounts receivable, inventory, and accounts payable to optimize its cash conversion cycle and improve its liquidity position. A lower cash conversion cycle can potentially enhance the company's financial health and operational efficiency.