LCI Industries (LCII)

Short-term

Turnover ratios

The activity ratios of LCI Industries indicate the efficiency of the company in managing its resources related to inventory, receivables, payables, and working capital.

1. Inventory Turnover:
- LCI Industries has maintained a relatively stable inventory turnover ratio over the quarters, ranging from 3.59 to 3.92.
- The company is efficiently managing its inventory, with a higher turnover implying that it is selling and replenishing its inventory at a quicker pace.

2. Receivables Turnover:
- The company's receivables turnover ratio has varied significantly over the quarters, from 9.06 to 24.30.
- A higher receivables turnover ratio indicates that LCI Industries is collecting its accounts receivable more quickly, which is favorable for liquidity and cash flow.

3. Payables Turnover:
- LCI Industries has shown a decreasing trend in payables turnover from Q1 2022 to Q4 2023, with fluctuations in between.
- A decline in payables turnover may suggest that the company is taking longer to pay its suppliers, which could impact relationships with vendors.

4. Working Capital Turnover:
- The working capital turnover ratio has also fluctuated over the quarters, ranging from 4.70 to 5.50.
- A higher working capital turnover ratio indicates that the company is efficiently utilizing its working capital to generate revenue and sales.

Overall, LCI Industries appears to be efficiently managing its inventory and working capital, although there are fluctuations in receivables and payables turnover ratios. Further analysis of the underlying reasons for these fluctuations may provide insights into the company's operational efficiency and cash flow management.

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Average number of days

The activity ratios of LCI Industries provide insights into the efficiency of the company's operations in managing its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH):
- LCI Industries' days of inventory on hand have shown a fluctuating trend over the past eight quarters, ranging from 93.22 days to 107.68 days.
- A lower DOH indicates better inventory management efficiency, as it represents the number of days the company holds inventory before it is sold.
- The decreasing trend in recent quarters suggests that the company may be improving its inventory turnover and managing its inventory levels more effectively.

2. Days of Sales Outstanding (DSO):
- LCI Industries' days of sales outstanding have varied significantly, ranging from 15.02 days to 40.28 days over the past eight quarters.
- A lower DSO indicates faster collection of receivables and better credit management practices.
- The fluctuating trend suggests potential challenges in collecting receivables promptly or changes in the company's credit policy that may impact cash flows.

3. Number of Days of Payables:
- The number of days of payables for LCI Industries has shown variability, with the range spanning from 13.32 days to 32.31 days over the past eight quarters.
- A higher number of days of payables could indicate that the company is effectively using trade credit to manage its cash flows and working capital.
- The decreasing trend in recent quarters suggests that the company may be paying its suppliers more promptly or negotiating favorable payment terms.

In conclusion, LCI Industries should continue monitoring and managing its activity ratios to enhance operational efficiency and maximize cash flow performance.

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Long-term

The long-term activity ratios of LCI Industries, as indicated by the fixed asset turnover and total asset turnover, have shown a decreasing trend over the quarters from Q1 2022 to Q4 2023.

The fixed asset turnover ratio, which measures the efficiency of the company in generating sales from its fixed assets, has decreased gradually from 11.37 in Q1 2022 to 8.13 in Q4 2023. This suggests that the company is generating fewer sales relative to its investment in fixed assets over time. A lower fixed asset turnover ratio may indicate underutilization or inefficiency in the management of fixed assets.

Similarly, the total asset turnover ratio, which reflects the company's ability to generate sales from all its assets, has also exhibited a declining trend from 1.41 in Q1 2022 to 1.28 in Q4 2023. This decrease signifies that LCI Industries is becoming less efficient in utilizing its total assets to generate sales revenue. A decreasing total asset turnover ratio may imply operational inefficiencies or a decline in the company's overall productivity.

Overall, the decreasing trends in both the fixed asset turnover and total asset turnover ratios suggest that LCI Industries may be facing challenges in effectively utilizing its assets to drive revenue generation. It is essential for the company to address these issues to improve operational efficiency and profitability in the long term.