Louisiana-Pacific Corporation (LPX)
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 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 69.40 | 66.96 | 68.40 | 66.09 | 52.21 | 53.30 | 51.24 | 67.26 | 49.16 | 69.11 | 67.57 | 68.87 | 60.37 | 46.26 | 46.03 | 52.30 | 48.22 | 46.66 | 52.68 | 54.63 |
| Days of sales outstanding (DSO) | days | 21.92 | 25.14 | 22.81 | 16.51 | 12.03 | 15.67 | 19.26 | 27.89 | 15.28 | 24.64 | 32.79 | 34.04 | 27.99 | 33.76 | 28.10 | 27.14 | 25.91 | 28.28 | 25.88 | 22.27 |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 91.32 | 92.10 | 91.21 | 82.60 | 64.24 | 68.96 | 70.50 | 95.15 | 64.44 | 93.75 | 100.36 | 102.91 | 88.36 | 80.02 | 74.13 | 79.44 | 74.13 | 74.94 | 78.57 | 76.90 |
December 31, 2023 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 69.40 + 21.92 – —
= 91.32
The cash conversion cycle of Louisiana-Pacific Corp. has shown fluctuations over the past 8 quarters. In Q4 2023, the company's cash conversion cycle was 65.43 days, indicating that it took approximately 65.43 days for Louisiana-Pacific to convert its investments in inventory and other resources into cash from sales. This represents an improvement compared to the previous quarter, where the cash conversion cycle was 98.11 days.
It is noteworthy that in Q4 2022, the company had a relatively low cash conversion cycle of 36.52 days, which suggests that Louisiana-Pacific was efficient in managing its working capital during that period. However, this improved efficiency was not sustained in the following quarters, as the cash conversion cycle increased in subsequent periods.
The fluctuation in the cash conversion cycle indicates potential challenges in managing working capital efficiently, which could impact the company's liquidity and overall financial performance. Monitoring and addressing the factors influencing the cash conversion cycle are essential for Louisiana-Pacific to optimize its cash flow and operational efficiency.
Peer comparison
Dec 31, 2023