Leslies Inc (LESL)
Cash conversion cycle
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 96.84 | 89.56 | 125.58 | 140.96 | 114.82 | 98.42 | 102.25 | 103.34 | 75.79 | 63.15 | |||
| Days of sales outstanding (DSO) | days | 7.08 | 9.18 | 13.98 | — | 12.09 | 11.88 | 12.50 | 12.11 | 11.75 | 12.21 | |||
| Number of days of payables | days | 18.42 | 16.82 | 42.41 | 40.03 | 31.35 | 42.58 | 61.95 | 48.19 | 30.84 | 32.07 | |||
| Cash conversion cycle | days | 85.49 | 81.93 | 97.15 | 100.93 | 95.57 | 67.73 | 52.80 | 67.26 | 56.71 | 43.29 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 96.84 + 7.08 – 18.42
= 85.49
Leslies Inc's cash conversion cycle has fluctuated over the period analyzed. The trend indicates some inconsistency and variability in managing its operating cycle efficiently.
From December 2020 to June 2022, there was a gradual decline in the cash conversion cycle, suggesting an improvement in managing cash flows, inventory, and receivables. However, in the following quarters, the cycle increased notably, reaching a peak in March 2023. This increase may indicate challenges in efficiently converting inventory and receivables into cash during this period.
It is essential for Leslies Inc to closely monitor its cash conversion cycle to ensure effective management of working capital and liquidity. Analyzing the reasons behind the fluctuations observed can help the company implement strategies to optimize cash flow, improve inventory turnover, and streamline accounts receivable collection processes.
Peer comparison
Dec 31, 2023