Lennar Corporation (LEN)
Cash conversion cycle
| Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | May 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 20,366.19 | — | 12,180.66 | 11,954.73 | 12,284.89 | — | 16,321.95 | 16,447.68 | 15,800.21 | — | 1,257.00 | 668.24 | 454.94 | 348.22 | 356.85 | 359.17 | 374.11 | 366.42 | 396.34 | 392.35 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 20,366.19 | 0.00 | 12,180.66 | 11,954.73 | 12,284.89 | 0.00 | 16,321.95 | 16,447.68 | 15,800.21 | 0.00 | 1,257.00 | 668.24 | 454.94 | 348.22 | 356.85 | 359.17 | 374.11 | 366.42 | 396.34 | 392.35 |
February 29, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 20,366.19 + — – —
= 20,366.19
The cash conversion cycle of Lennar Corporation has exhibited significant fluctuations over the periods indicated. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources back into cash flow from sales.
On Feb 29, 2024, Lennar Corporation had a relatively long cash conversion cycle of 20,366.19 days, indicating that it took a considerable amount of time for the company to convert its investments into cash receipts from customers. This could suggest potential inefficiencies in managing its working capital.
The cash conversion cycle was significantly improved on Nov 30, 2023, Aug 31, 2023, and May 31, 2023, when it dropped to 0.00 days. A cash conversion cycle of 0.00 days suggests that the company was able to effectively manage its working capital, indicating a quick turnaround in converting resources to cash.
However, there were fluctuations in the cash conversion cycle in the previous periods as well. On Feb 28, 2023, the cycle was 12,284.89 days, and then improved to 0.00 days on Nov 30, 2022. Similarly, on Aug 31, 2022, the cycle was 16,321.95 days, and then reduced to 16,447.68 days on May 31, 2022, and further improved to 15,800.21 days on Feb 28, 2022.
Lennar Corporation showed a significant improvement in its cash conversion cycle in the earlier periods. For instance, on Nov 30, 2021, the cycle was only 668.24 days, indicating efficient management of working capital. This trend continued in subsequent periods, with further reductions in the cash conversion cycle.
Overall, analyzing the cash conversion cycle data, it can be concluded that Lennar Corporation has experienced fluctuations in its efficiency in managing working capital, with periods of both prolonged and minimized cash conversion cycles. Further investigation into the factors influencing these fluctuations would be beneficial for the company's financial management strategy.
Peer comparison
Feb 29, 2024