Lennar Corporation (LEN)

Short-term

Turnover ratios

Lennar Corporation's activity ratios provide insights into how effectively the company is managing its assets and liabilities to generate sales and revenue.

1. Inventory Turnover: Lennar's inventory turnover ratio indicates how many times the company is able to sell and replace its inventory within a given period. The decrease in the inventory turnover ratio from 2020 to 2024 suggests that the company may be experiencing challenges in managing its inventory efficiently. This could be due to factors such as overstocking, changing consumer preferences, or supply chain disruptions.

2. Receivables Turnover: Unfortunately, there is no data provided for Lennar's receivables turnover, which could indicate that the company does not have a significant accounts receivable component impacting its operations.

3. Payables Turnover: Similarly, data for payables turnover is also not available, which limits our ability to assess how effectively Lennar is managing its accounts payable and vendor relationships.

4. Working Capital Turnover: The working capital turnover ratio measures how efficiently a company is using its working capital to generate sales. Lennar's decreasing trend in the working capital turnover ratio from 2020 to 2024 indicates a decline in the company's ability to generate sales relative to the amount of working capital invested. This could signal inefficiencies in managing working capital or challenges in converting working capital into revenue.

Overall, Lennar Corporation should closely monitor its activity ratios to identify areas for improvement in its operational efficiency and financial management.

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Average number of days

Based on the provided data, the Days of Inventory on Hand (DOH) for Lennar Corporation have shown significant fluctuations over the years. The company started with around 350 days of inventory on hand in 2020, which increased dramatically to over 16,000 days by August 31, 2022. This was followed by a decrease to around 11,900 days by May 31, 2023, before increasing again to over 20,000 days by February 29, 2024. Such high levels of inventory days indicate that Lennar may be facing operational challenges in managing its inventory efficiently.

On the other hand, the Days of Sales Outstanding (DSO) and the Number of Days of Payables data are not available for analysis, as the values are indicated as "— days" for all time periods provided. This lack of available data makes it impossible to assess the efficiency of Lennar's sales collection and payment practices.

Overall, the extreme fluctuations in the Days of Inventory on Hand suggest that Lennar Corporation may need to focus on improving its inventory management processes to avoid excess inventory buildup, which can tie up capital and lead to potential inefficiencies in its operations.

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Long-term

Lennar Corporation's Fixed Asset Turnover ratio reflects the efficiency of the company in generating sales revenue from its investment in fixed assets. The ratio has shown fluctuating trends over the years, with a substantial increase from November 2023 to August 2024, indicating improved utilization of fixed assets during that period. However, there was a notable decline in the ratio from August 2022 to November 2022, suggesting a temporary decrease in sales generated from fixed assets during that period.

On the other hand, the Total Asset Turnover ratio measures how well Lennar Corporation utilizes its total assets to generate revenue. The ratio has shown a generally increasing trend since November 2022, indicating an improvement in the company's overall asset utilization efficiency. The ratio peaked in August 2024, showing that Lennar Corporation was generating more revenue relative to its total assets during that period.

Overall, Lennar Corporation's long-term activity ratios suggest varying levels of efficiency in asset utilization over the years, with fluctuations in both Fixed Asset Turnover and Total Asset Turnover ratios. Monitoring these ratios can provide insights into the company's operational efficiency and potential areas for improvement in managing its assets to drive revenue growth.