Lennar Corporation (LEN)
Liquidity ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 4.27 | 16.88 | 15.57 | 15.48 | 17.62 | 16.55 | 16.01 | 15.39 | 16.99 | 16.62 | 3.28 | 3.20 | 3.53 | 4.20 | 2.89 | 2.71 | 1.88 | 2.89 | 20.26 | 17.56 |
| Quick ratio | 0.85 | 4.05 | 2.42 | 2.56 | 2.89 | 3.00 | 1.02 | 1.02 | 1.24 | 2.27 | 2.29 | 2.37 | 2.52 | 2.81 | 1.98 | 2.31 | 0.94 | 1.36 | 0.98 | 0.82 |
| Cash ratio | 0.85 | 4.05 | 2.42 | 2.56 | 2.89 | 3.00 | 1.02 | 1.02 | 1.24 | 2.27 | 2.29 | 2.37 | 2.52 | 2.81 | 1.98 | 2.31 | 0.94 | 1.36 | 0.98 | 0.82 |
Lennar Corporation's liquidity ratios indicate strong short-term financial health and ability to meet its current obligations. The current ratio has been consistently high, well above 1, indicating that the company has more than enough current assets to cover its current liabilities. The quick ratio and cash ratio also show strong liquidity positions, with values generally above 1, indicating that the company has an adequate amount of highly liquid assets to cover its short-term liabilities.
It is worth noting that there are fluctuating trends in the quick and cash ratios, but they remain above the critical level of 1. These fluctuations may be due to changes in the composition of current assets that are included in the calculation of these ratios. Overall, the liquidity ratios suggest that Lennar Corporation is well-positioned to meet its short-term financial obligations and has a robust liquidity position.
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
The cash conversion cycle for Lennar Corporation has shown significant fluctuations over the past few quarters. The cycle, which represents the time it takes for the company to convert its investments in inventory and other resources into cash inflows from sales, indicates the efficiency of Lennar's working capital management.
In the most recent period ending February 29, 2024, the cash conversion cycle was recorded at 20,366.19 days, signaling a substantial increase compared to previous periods. This prolonged cycle may suggest inefficiencies in Lennar's inventory management, collection of receivables, or payment of payables, which could potentially tie up liquidity and impact the company's overall cash flow.
Prior to this, the cash conversion cycle was significantly reduced to 0 days in some periods, such as November 2023 and August 2022, indicating that Lennar was able to swiftly convert its investments into cash. Conversely, there were instances where the cycle stretched out to over 15,000 days, such as in August 2021 and August 2020, suggesting potential challenges in managing working capital effectively or experiencing delays in the cash conversion process.
The trend in the cash conversion cycle for Lennar Corporation underscores the importance of monitoring and optimizing working capital processes to ensure efficient cash flow management. By addressing the factors contributing to prolonged cycles and leveraging periods of operational excellence, Lennar can enhance its overall financial performance and liquidity position.