Leggett & Platt Incorporated (LEG)
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 | 61.63 | 78.36 | 88.52 | 73.69 | 61.33 |
| Days of sales outstanding (DSO) | days | 54.92 | 42.72 | 44.08 | 47.52 | 44.89 |
| Number of days of payables | days | 40.32 | 44.76 | 54.70 | 58.85 | 44.64 |
| Cash conversion cycle | days | 76.23 | 76.31 | 77.90 | 62.37 | 61.58 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 61.63 + 54.92 – 40.32
= 76.23
Leggett & Platt, Inc.'s cash conversion cycle has experienced fluctuations over the past five years. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory into cash flows from sales.
In 2023, the cash conversion cycle decreased to 75.96 days from 81.93 days in 2022, indicating an improvement in the efficiency of the company's working capital management. This suggests that Leggett & Platt, Inc. was able to generate cash from its operations more quickly in 2023 compared to the previous year.
Comparing the data to 2021, where the cash conversion cycle was 81.20 days, there was a slight decrease in 2023, indicating better efficiency in managing inventory, accounts receivable, and accounts payable.
In 2020, there was a notably lower cash conversion cycle of 58.12 days, which suggests the company was exceptionally efficient in managing its working capital that year. However, in 2019, the cash conversion cycle was 62.55 days, slightly higher than in 2023 but still lower than the figures reported in 2021 and 2022.
Overall, the trend in Leggett & Platt, Inc.'s cash conversion cycle shows some variability, but the company has made improvements in working capital management in 2023 compared to the previous years, with a focus on optimizing inventory turnover, collecting receivables faster, and managing payables efficiently.
Peer comparison
Dec 31, 2023