Landstar System Inc (LSTR)
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 | — | — | — | — | — |
| Days of sales outstanding (DSO) | days | 51.79 | 51.19 | 47.50 | 64.45 | 67.49 |
| Number of days of payables | days | 360.54 | 376.20 | 475.79 | 585.91 | 457.09 |
| Cash conversion cycle | days | -308.74 | -325.01 | -428.29 | -521.46 | -389.61 |
December 31, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= — + 51.79 – 360.54
= -308.74
The cash conversion cycle is a crucial metric that indicates how efficiently a company manages its working capital. Based on the data provided for Landstar System Inc, we can observe a trend of negative cash conversion cycle values over the years, ranging from -389.61 days in December 2020 to -308.74 days in December 2024.
A negative cash conversion cycle implies that the company is able to convert its investments in inventory and accounts receivable into cash quickly, effectively generating cash before needing to pay its suppliers. This can be indicative of strong financial management and efficient operations.
The decreasing trend from 2020 to 2024 suggests improvements in managing working capital and the speed of converting it into cash. This could be attributed to effective inventory management, timely collections from customers, and optimized payment schedules to suppliers.
Overall, Landstar System Inc's consistently negative cash conversion cycle values indicate efficient working capital management, enabling the company to maintain a healthy cash flow position and potentially invest in growth opportunities or weather economic uncertainties.
Peer comparison
Dec 31, 2024