Louisiana-Pacific Corporation (LPX)
Cash conversion cycle
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 61.79 | 69.40 | 52.21 | 51.98 | 60.37 |
| Days of sales outstanding (DSO) | days | 16.26 | 21.92 | 12.03 | 15.76 | 27.99 |
| Number of days of payables | days | — | — | — | — | — |
| Cash conversion cycle | days | 78.04 | 91.32 | 64.24 | 67.74 | 88.36 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 61.79 + 16.26 – —
= 78.04
Louisiana-Pacific Corporation's cash conversion cycle has exhibited fluctuations over the period specified. In December 2020, the cash conversion cycle was 88.36 days, indicating that it took the company an average of 88.36 days to convert its investments in inventory and accounts receivables into cash.
By the end of December 2021, the cash conversion cycle had decreased to 67.74 days, suggesting an improvement in the company's efficiency in managing its working capital. This trend continued in December 2022, with a further reduction to 64.24 days, indicating that the company was able to convert its resources into cash more quickly.
However, in December 2023, the cash conversion cycle increased to 91.32 days, suggesting a potential slowdown in the company's ability to convert its assets into cash. Despite this increase, the cycle was still lower than in December 2020.
By December 2024, the cash conversion cycle had decreased to 78.04 days, reflecting a partial recovery from the peak observed in 2023. Overall, the trend in the cash conversion cycle shows variability, with fluctuations in efficiency in managing working capital over the period under consideration. It would be important for the company to monitor and potentially improve this metric to enhance its cash flow management and overall financial performance.
Peer comparison
Dec 31, 2024