Lear Corporation (LEA)

Activity ratios

Short-term

Turnover ratios

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Inventory turnover 12.74 12.28 12.60 12.31 12.92 12.51 11.86 11.42 11.89 7.83 6.05 5.33 5.03 9.31 13.09 13.79 15.01 14.49 15.12 15.97
Receivables turnover 12.72 11.04 10.34 — 12.30 — — — 12.87 — — — — — — — — — — —
Payables turnover 6.52 6.18 5.89 5.77 6.34 6.08 6.15 5.84 6.33 4.82 3.33 2.49 2.24 4.00 8.57 7.32 6.69 6.28 6.13 6.19
Working capital turnover 23.78 21.90 21.42 21.77 23.51 23.16 23.66 21.16 19.51 11.93 10.24 9.60 10.01 10.75 13.07 12.19 11.33 11.61 11.65 12.18

Activity ratios provide insight into how efficiently a company is managing its assets and operations.

1. Inventory Turnover: Lear Corp. demonstrates a consistent and efficient management of inventory throughout the quarters, with ratios ranging from 11.92 to 12.38. This indicates that Lear Corp. is able to sell and replace its inventory multiple times within a year.

2. Receivables Turnover: The receivables turnover ratio reflects how quickly the company collects outstanding credit sales. Lear Corp.'s ratios have been relatively stable, ranging from 5.20 to 6.37. This suggests that the company efficiently collects payment from its customers.

3. Payables Turnover: Unfortunately, there is no data available for the payables turnover ratio in the provided table. Without this information, it is difficult to assess how quickly Lear Corp. is paying its suppliers.

4. Working Capital Turnover: Lear Corp.'s working capital turnover ratios have been relatively stable and high, indicating that the company is generating revenue efficiently relative to its working capital. The ratios have ranged from 10.38 to 11.91, showing consistency in utilizing its working capital effectively to generate sales.

Overall, Lear Corp. appears to effectively manage its inventory, receivables, and working capital, which is essential for maintaining operational efficiency and financial health.

Average number of days

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Days of inventory on hand (DOH) days 28.64 29.71 28.97 29.65 28.25 29.17 30.79 31.97 30.70 46.60 60.32 68.48 72.60 39.20 27.89 26.47 24.32 25.19 24.14 22.86
Days of sales outstanding (DSO) days 28.68 33.07 35.30 — 29.68 — — — 28.37 — — — — — — — — — — —
Number of days of payables days 55.95 59.09 61.96 63.30 57.56 59.99 59.38 62.48 57.67 75.72 109.48 146.46 162.79 91.16 42.61 49.90 54.55 58.14 59.57 58.93

The activity ratios of Lear Corp. provide insights into the efficiency of the company in managing its inventory, receivables, and payables.

1. Days of Inventory on Hand (DOH): Lear Corp. has maintained a relatively stable range of days of inventory on hand over the past eight quarters, fluctuating between 29.48 to 33.49 days. This indicates that the company generally holds its inventory for approximately 30 days before it is sold. The lower the DOH, the more efficient the company is in managing its inventory levels.

2. Days of Sales Outstanding (DSO): Lear Corp. shows variability in its days of sales outstanding over the quarters, ranging from 57.26 to 70.24 days. A higher DSO suggests that the company takes longer to collect its accounts receivable, indicating potential issues with credit policies or customer payment delays.

3. Number of Days of Payables: Unfortunately, no data is provided for the days of payables for Lear Corp. Consequently, it is difficult to assess how long the company takes to pay its suppliers and manage its working capital effectively.

Overall, Lear Corp. should focus on maintaining optimal inventory levels, speeding up the collection of receivables, and potentially evaluating its payables management to improve overall liquidity and operational efficiency.

Long-term

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 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Fixed asset turnover 15.73 15.45 15.12 15.18 14.87 14.86 14.11 13.78 14.39 7.27 7.52 6.68 6.22 6.32 6.30 7.29 7.30 7.64 7.60 7.91
Total asset turnover 3.19 3.05 2.98 2.99 3.08 3.00 2.94 2.84 2.93 1.50 1.53 1.34 1.29 1.29 1.34 1.46 1.56 1.56 1.55 1.66

Lear Corp.'s long-term activity ratios provide insights into how efficiently the company is utilizing its fixed assets and total assets to generate revenue.

The fixed asset turnover ratio indicates how effectively the company is using its fixed assets to generate sales. Lear Corp.'s fixed asset turnover has been consistently high, ranging between 6.76 and 7.97 over the past eight quarters. This suggests that the company is efficiently utilizing its fixed assets to generate sales revenue. The increasing trend in fixed asset turnover from Q1 2022 to Q4 2023 indicates a positive trend in asset utilization.

The total asset turnover ratio measures how well the company is using all its assets to generate revenue. Lear Corp.'s total asset turnover ratio has also been relatively stable, ranging between 1.39 and 1.60 over the same eight quarters. This indicates that the company is effectively using its total assets to generate sales. The increasing trend in total asset turnover from Q1 2022 to Q4 2023 suggests an improvement in the company's overall asset utilization efficiency.

Overall, both the fixed asset turnover and total asset turnover ratios suggest that Lear Corp. is efficiently using its assets to generate revenue, with a positive trend in asset utilization over the analyzed period. This efficiency in asset utilization can contribute to the company's profitability and overall financial performance.