Lindsay Corporation (LNN)

Short-term

Turnover ratios

Lindsay Corporation's activity ratios provide insights into how efficiently the company manages its assets and liabilities.

1. Inventory turnover: The company's inventory turnover has ranged from 2.46 to 3.30 over the past few periods, indicating that on average, inventory is sold and replaced approximately 2.5 to 3 times per year. The trend shows some fluctuations but generally remains within a stable range.

2. Receivables turnover: Lindsay Corporation's receivables turnover varies between 4.20 and 6.32, indicating that the company collects its outstanding receivables between approximately 4 to 6 times per year. The increasing trend suggests the company is improving its collection efficiency over time.

3. Payables turnover: The payables turnover ratios range from 7.05 to 12.02, showing the number of times payables are paid off within a year. The company has varying payment frequencies, potentially impacting its cash flow management and relationships with suppliers.

4. Working capital turnover: This ratio reflects how efficiently Lindsay Corporation utilizes its working capital to generate sales. The turnover ranges from 1.65 to 2.44, showing that the company generates sales revenue relative to its working capital base between around 1.6 to 2.4 times per year. A higher turnover indicates better efficiency in utilizing working capital to support revenue generation.

Overall, analyzing these activity ratios can help assess Lindsay Corporation's operational efficiency in managing its inventory, receivables, payables, and working capital to support its business operations and financial performance.

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Average number of days

Lindsay Corporation's activity ratios provide insights into the efficiency of managing its inventory, accounts receivable, and accounts payable.

1. Days of Inventory on Hand (DOH):
- The DOH has shown some fluctuation over the analyzed period, ranging from 110.45 days to 148.59 days.
- A higher number of days indicates that the company is holding onto its inventory for a longer period before selling it.
- In general, the trend is relatively stable, with a slight increase in recent periods. This could suggest potential issues with inventory management or slower inventory turnover.

2. Days of Sales Outstanding (DSO):
- DSO fluctuated between 57.71 days and 86.99 days during the period under review.
- A decrease in DSO indicates faster collection of accounts receivable, which is generally positive for liquidity.
- Although there are variations, the trend shows an overall improvement in collecting receivables more efficiently, which could positively impact cash flow.

3. Number of Days of Payables:
- The number of days of payables ranged from 30.37 days to 51.80 days.
- An increase in the number of days suggests that the company is taking longer to pay its suppliers, which could indicate a more favorable position in terms of cash management.
- The trend has been somewhat inconsistent, potentially indicating changes in the company's payment policies or relationships with suppliers.

Overall, Lindsay Corporation should focus on optimizing its inventory turnover rate, continue improving its accounts receivable collection efficiency, and maintain a balanced approach to managing its accounts payable. A closer examination of these activity ratios in conjunction with other financial metrics could provide a more comprehensive assessment of the company's operational performance.

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Long-term

Lindsay Corporation's long-term activity ratios can provide insights into how effectively the company is utilizing its assets to generate sales. The fixed asset turnover ratio measures how efficiently the company is using its fixed assets to generate revenue. Over the periods displayed, the fixed asset turnover ratio has shown a declining trend from 6.49 in November 2019 to 5.38 in August 2024. This suggests that the company is generating fewer sales relative to its investment in fixed assets.

On the other hand, the total asset turnover ratio reflects the company's ability to generate sales from all its assets, including both fixed and current assets. Lindsay Corporation's total asset turnover ratio has also exhibited a decreasing trend from 0.84 in May 2020 to 0.80 in August 2024. This decline indicates that the company's overall asset utilization efficiency has decreased over time.

Overall, the declining trend in both fixed asset turnover and total asset turnover ratios may indicate decreasing efficiency in asset utilization by Lindsay Corporation. This trend could be a point of concern as it suggests that the company may not be effectively generating sales in relation to its asset base. Further analysis of the underlying reasons for these trends, such as changes in operating efficiency or asset management strategies, would be warranted to understand the implications for the company's long-term performance.