Louisiana-Pacific Corporation (LPX)
Cash conversion cycle
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 61.84 | 65.00 | 65.64 | 72.09 | 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 |
| Days of sales outstanding (DSO) | days | 16.26 | 17.01 | 20.10 | 24.15 | 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 |
| Number of days of payables | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Cash conversion cycle | days | 78.11 | 82.01 | 85.74 | 96.24 | 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 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 61.84 + 16.26 – —
= 78.11
The cash conversion cycle of Louisiana-Pacific Corporation has fluctuated over the periods analyzed. It measures how long it takes for the company to convert its investments in inventory and other resources into cash flows from sales.
From March 2020 to June 2020, the cash conversion cycle decreased from 79.44 days to 74.13 days, indicating an improvement in the efficiency of converting resources into cash. However, from June 2020 to December 2020, there was an increasing trend in the cycle, reaching 88.36 days by the end of December 2020.
There was a significant spike in the cash conversion cycle by March 2021, reaching 102.91 days, which suggests a longer period required to turn investments into cash. The cycle decreased in the following quarters, dropped to 64.44 days by December 2021, signifying an improvement in the efficiency of the company's working capital management.
Throughout 2022, the cash conversion cycle remained relatively stable, hovering around 70-95 days. By the end of December 2022, the cycle decreased to 64.24 days before increasing again in the first half of 2023. From June 2023 to December 2024, the cycle fluctuated between 78.11 days and 96.24 days, indicating some variability in the efficiency of the company's cash conversion process.
Overall, analyzing the trend of the cash conversion cycle can provide insights into Louisiana-Pacific Corporation's efficiency in managing its working capital and converting investments into cash flows. It is essential for the company to strive for a shorter cash conversion cycle to optimize its liquidity and operational performance.
Peer comparison
Dec 31, 2024