Lennar Corporation (LEN)
Cash conversion cycle
| Nov 30, 2023 | Nov 30, 2022 | Nov 30, 2021 | Nov 30, 2020 | Nov 30, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | — | — | — | 348.22 | 366.42 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 0.00 | 0.00 | 0.00 | 348.22 | 366.42 |
November 30, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + — – —
= 0.00
The cash conversion cycle measures the time it takes for a company to convert its investment in inventory and other resources into cash flows from sales. Lennar Corp.'s cash conversion cycle has shown a downward trend over the past five years, from 328.28 days in 2019 to 240.84 days in 2023. This suggests an improvement in the efficiency of the company's working capital management.
The decrease in the cash conversion cycle indicates that Lennar Corp. has been able to reduce the time it takes to sell its inventory, receive payment from customers, and pay its suppliers. This trend could be attributed to more effective inventory management, faster collections from customers, and potentially extended payment terms with suppliers.
A shorter cash conversion cycle implies that Lennar Corp. is able to generate cash flows at a faster rate, which can improve its liquidity and working capital position. This may provide the company with more flexibility and financial stability to pursue growth opportunities or navigate economic uncertainties.
Overall, the declining trend in Lennar Corp.'s cash conversion cycle reflects improved operational efficiency and working capital management, which could positively impact the company's financial performance and resilience.
Peer comparison
Nov 30, 2023