Lear Corporation (LEA)

Short-term

Turnover ratios

The analysis of Lear Corporation's activity ratios reveals some key insights:

1. Inventory Turnover: Lear Corporation's inventory turnover ratio has been relatively stable over the years, ranging from 10.22 to 13.55. This indicates that the company is efficiently managing its inventory levels and turning over its inventory multiple times during the year.

2. Receivables Turnover: Unfortunately, data for the receivables turnover ratio is not available, making it difficult to assess how quickly the company is collecting payments from its customers. It would be beneficial to have this information to evaluate the efficiency of Lear Corporation's accounts receivable management.

3. Payables Turnover: Similar to receivables turnover, data for the payables turnover ratio is not provided. This ratio would have helped in understanding how quickly Lear Corporation is paying its suppliers and managing its accounts payable.

4. Working Capital Turnover: Lear Corporation's working capital turnover has shown some fluctuations but generally has been within a range of 9.61 to 13.42. A higher turnover indicates that the company is effectively utilizing its working capital to generate sales, which is a positive sign for operational efficiency.

In conclusion, Lear Corporation appears to be effectively managing its inventory and working capital, but further information on receivables and payables turnover would provide a more comprehensive assessment of the company's overall activity ratios.

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Average number of days

Based on the data provided, we can analyze the activity ratios for Lear Corporation as follows:

1. Days of Inventory on Hand (DOH):
- The DOH indicates how many days, on average, the company holds inventory before selling it.
- Lear Corporation's DOH has shown fluctuation over the analyzed periods, ranging from a low of 26.94 days on December 31, 2024, to a high of 35.72 days on September 30, 2021.
- Generally, a lower DOH indicates efficient inventory management, while a higher DOH may signify excess or slow-moving inventory.

2. Days of Sales Outstanding (DSO):
- Unfortunately, the data provided does not include information on DSO for Lear Corporation. DSO measures the average number of days it takes for a company to collect revenue after a sale.
- A lower DSO is typically preferred as it indicates quicker cash conversion from sales.

3. Number of Days of Payables:
- Similarly, there is no data available on the number of days of payables for Lear Corporation in the provided information.
- This ratio reflects the average number of days it takes for a company to pay its suppliers.
- A higher number of days of payables may suggest that the company is effectively using trade credit to manage its cash flow.

In conclusion, while we have detailed information on the DOH for Lear Corporation, unfortunately, data on DSO and the number of days of payables are not available. These ratios collectively provide insights into the efficiency of inventory management, collection of receivables, and payment to suppliers within the company. Additional information on DSO and payables turnover would further enhance the assessment of Lear Corporation's operational efficiency and financial performance.

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Long-term

The Fixed Asset Turnover ratio for Lear Corporation has shown fluctuations over the past few years, ranging from 6.08 to 7.71. This ratio indicates how efficiently the company is utilizing its fixed assets to generate sales. A higher ratio suggests that Lear is effectively using its fixed assets to generate revenue.

On the other hand, the Total Asset Turnover ratio for Lear Corporation has also varied, with values ranging from 1.29 to 1.66. This ratio reflects the company's ability to generate sales in relation to its total assets. An increasing trend in this ratio indicates that the company is generating more revenue per dollar of assets, highlighting efficient asset utilization.

Overall, both ratios provide insights into Lear Corporation's operational efficiency and asset utilization. The company's management should continue to monitor these ratios to ensure optimal performance and sustainable growth in the long term.