Lindsay Corporation (LNN)

Short-term

Turnover ratios

Lindsay Corporation's activity ratios provide insight into the company's efficiency in managing its inventory, receivables, payables, and working capital over the past five years.

Inventory turnover: The company's inventory turnover has been relatively stable, with a slight decline from 3.57 in 2019 to 2.96 in 2023. This indicates that the company is taking longer to sell its inventory but should be assessed in the context of the industry and company-specific factors.

Receivables turnover: The receivables turnover has fluctuated over the years, decreasing from 5.88 in 2019 to 4.66 in 2023. This suggests that the company took longer to collect its receivables in 2023 compared to previous years, which could impact its cash flow and liquidity.

Payables turnover: The payables turnover has shown some variability, with a slight increase from 11.19 in 2019 to 10.41 in 2023. This indicates that the company is taking slightly longer to pay its suppliers, which may have implications for vendor relationships and working capital management.

Working capital turnover: The trend in working capital turnover has been relatively stable, hovering around 2. This suggests that the company is effectively utilizing its working capital to generate sales, although the slight decline from 2.44 in 2022 to 1.92 in 2023 warrants further investigation.

Overall, the analysis of Lindsay Corporation's activity ratios suggests some areas of potential concern, such as the decrease in inventory turnover and fluctuation in receivables turnover. It may be beneficial for the company to conduct a more in-depth analysis of its operational processes to identify opportunities for improvement in managing its inventory and receivables effectively. Additionally, monitoring the impact of these ratios on the company's cash flow and liquidity is essential for making informed financial decisions.

---

Average number of days

Lindsay Corporation's activity ratios indicate how efficiently the company manages its inventory, collects receivables, and pays its suppliers.

The days of inventory on hand (DOH) have been relatively stable, ranging from 102.24 days in 2019 to 127.00 days in 2021. However, 2023 has seen a slight decrease to 123.44 days. This suggests that the company has been maintaining a consistent level of inventory relative to its sales over the years.

The days of sales outstanding (DSO) have shown some variability, with a peak of 78.39 days in 2023, compared to a low of 60.19 days in 2021. The increase in DSO in 2023 may indicate a lag in collecting receivables, which could potentially impact the company's cash flow.

The number of days of payables has also fluctuated, with a decrease from 39.53 days in 2021 to 35.05 days in 2023. This suggests that the company has been able to manage its payables more efficiently in the most recent year.

Overall, while Lindsay Corporation has maintained a relatively stable inventory level, it may need to focus on improving its collection of receivables to enhance cash flow, despite effectively managing its payables.

---

Long-term

The long-term activity ratios for Lindsay Corporation indicate the efficiency with which the company is utilizing its assets to generate sales. The fixed asset turnover, which measures the company's ability to generate sales from its investment in fixed assets, has shown some fluctuation over the past five years. In 2022, the fixed asset turnover was at its highest at 8.16, signifying that the company was able to generate $8.16 in sales for every dollar invested in fixed assets. However, this ratio decreased to 6.76 in 2023, indicating a decline in this efficiency.

On the other hand, the total asset turnover, which reflects the company's ability to generate sales from all its assets, has also fluctuated but remained relatively stable over the same period. The ratio was at its peak in 2022 at 1.08, and then decreased to 0.90 in 2023. This indicates that the company generated $0.90 in sales for every dollar of total assets in 2023. Overall, the long-term activity ratios suggest that Lindsay Corporation's efficiency in utilizing its assets to generate sales has shown some variability, and management may need to focus on optimizing the utilization of both fixed and total assets in the future.