Louisiana-Pacific Corporation (LPX)
Working capital turnover
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Revenue | US$ in thousands | 2,581,000 | 3,854,000 | 3,915,000 | 2,399,000 | 2,310,000 |
| Total current assets | US$ in thousands | 778,000 | 854,000 | 890,000 | 993,000 | 619,000 |
| Total current liabilities | US$ in thousands | 259,000 | 336,000 | 351,000 | 286,000 | 244,000 |
| Working capital turnover | 4.97 | 7.44 | 7.26 | 3.39 | 6.16 |
December 31, 2023 calculation
Working capital turnover = Revenue ÷ (Total current assets – Total current liabilities)
= $2,581,000K ÷ ($778,000K – $259,000K)
= 4.97
Louisiana-Pacific Corp.'s working capital turnover has fluctuated over the past five years, indicating changes in the efficiency of its working capital management. A higher turnover ratio signifies that the company is generating more revenue per dollar of working capital invested.
The trend shows a peak in 2021 with a working capital turnover of 8.43, which suggests that the company was able to efficiently utilize its working capital during that period. In contrast, the ratio decreased in 2020 to 3.94, indicating a decline in efficiency in turning working capital into sales.
The company experienced a significant improvement in 2022 with a working capital turnover of 7.47, showing that it was able to better leverage its working capital to generate revenue. However, in 2023, the ratio dipped to 4.97, suggesting a slight decrease in efficiency compared to the previous year but still an improvement from 2020.
Overall, Louisiana-Pacific Corp. should continue to monitor its working capital turnover ratio to ensure effective management of its working capital and to optimize its operational efficiency and financial performance.
Peer comparison
Dec 31, 2023