LCI Industries (LCII)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 3.88 | 3.92 | 3.82 | 3.13 | 4.23 |
| Receivables turnover | — | — | — | — | — |
| Payables turnover | — | — | — | — | — |
| Working capital turnover | 5.00 | 5.24 | 5.37 | 4.76 | 6.17 |
Based on the provided data for LCI Industries' activity ratios:
1. Inventory Turnover:
- The inventory turnover ratio indicates how efficiently the company manages its inventory. LCI Industries' inventory turnover has shown a declining trend over the years, from 4.23 in 2020 to 3.88 in 2024. This decline may suggest that the company is holding onto its inventory for a longer period, which could tie up working capital and potentially lead to obsolescence.
2. Receivables Turnover:
- Unfortunately, there is no data available for LCI Industries' receivables turnover ratio for the years 2020 to 2024. This ratio would have provided insight into how quickly the company collects payments from its customers.
3. Payables Turnover:
- Similarly, there is no data provided for LCI Industries' payables turnover ratio for the years 2020 to 2024. This ratio would have indicated how efficiently the company pays its suppliers.
4. Working Capital Turnover:
- The working capital turnover ratio measures how efficiently a company utilizes its working capital to generate sales. LCI Industries' working capital turnover has fluctuated over the years, from 6.17 in 2020 to 5.00 in 2024. A higher ratio suggests better utilization of working capital, and the decreasing trend in LCI Industries' ratio may indicate a lower efficiency in converting working capital into sales.
Overall, the analysis of LCI Industries' activity ratios reveals mixed efficiency in managing inventory, working capital, and the lack of data for receivables and payables turnover ratios limits a comprehensive assessment of the company's overall liquidity and operational efficiency.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 93.96 | 93.22 | 95.54 | 116.63 | 86.25 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — |
| Number of days of payables | days | — | — | — | — | — |
The Days of Inventory on Hand (DOH) measure for LCI Industries indicates the number of days it takes for the company to sell its inventory. The trend in DOH from 2020 to 2024 shows an increase, from 86.25 days to 93.96 days. This suggests that the company is holding onto its inventory for a longer period before selling it, which could tie up working capital and increase storage costs.
The Days of Sales Outstanding (DSO) ratio, representing the average number of days it takes for the company to collect revenue after a sale, is not provided in the data, indicating that information on the collection of receivables is not available. Ideally, a lower DSO indicates faster collections, improving cash flow for the company.
The Number of Days of Payables ratio, indicating the average number of days it takes for the company to pay its suppliers, is also not available in the data. A longer period for payment would allow the company to hold onto cash for a longer time, improving liquidity, but could strain relationships with suppliers if extended too far.
In summary, based on the available information, LCI Industries' inventory turnover has slowed down over the years, while data on receivables and payables are not provided for a complete analysis of the company's activity ratios.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | — | — | 10.80 | 7.57 | 7.22 |
| Total asset turnover | 1.29 | 1.28 | 1.60 | 1.36 | 1.22 |
Over the five-year period analyzed, LCI Industries demonstrated an upward trend in both Fixed Asset Turnover and Total Asset Turnover ratios, indicating an improvement in the efficiency of utilizing its assets to generate sales revenue.
Fixed Asset Turnover specifically increased from 7.22 in 2020 to 10.80 in 2022. This suggests that LCI Industries was able to generate $10.80 of sales for every dollar invested in fixed assets in 2022, reflecting a more efficient utilization of the company's long-term assets to generate revenue.
Total Asset Turnover also saw an overall improvement, rising from 1.22 in 2020 to 1.29 in 2024. This indicates that the company was able to generate $1.29 in sales for every dollar of total assets employed in the business by the end of 2024.
The increase in both ratios signifies that LCI Industries effectively managed its long-term assets to drive revenue growth and enhance operational efficiency during the period under review. These ratios are key indicators of the company's ability to generate sales relative to its investment in assets, portraying a positive trend in asset utilization and operational performance.