Light & Wonder Inc (LNW)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Inventory turnover | 6.29 | 6.88 | 10.77 | 9.45 | 9.53 |
| Receivables turnover | 5.04 | 4.48 | 4.84 | 3.71 | 4.74 |
| Payables turnover | 4.62 | 7.19 | 5.17 | 7.50 | 10.29 |
| Working capital turnover | 4.14 | 1.90 | 2.70 | 1.69 | 4.22 |
Based on the activity ratios of Light & Wonder Inc over the past five years, we can derive several insights:
1. Inventory Turnover: The company's inventory turnover has fluctuated over the years, with a general decreasing trend from 6.21 in 2021 to 4.93 in 2023. This indicates that the company is selling its inventory less efficiently compared to previous years.
2. Receivables Turnover: Light & Wonder Inc's receivables turnover has shown a generally increasing trend over the years, signifying that the company is collecting its receivables at a faster rate. This improvement in collecting receivables can indicate better credit policies or more efficient collection processes.
3. Payables Turnover: The payables turnover ratio has fluctuated significantly, indicating variations in the company's payment policies. The decrease from 5.71 in 2020 to 3.62 in 2023 suggests that the company is taking longer to pay its suppliers, potentially impacting its relationships with creditors.
4. Working Capital Turnover: The working capital turnover ratio has also shown fluctuations over the years, with a significant increase in 2023 compared to 2022. This could indicate that the company is managing its working capital more efficiently in the most recent year, generating more revenue from each unit of working capital.
Overall, these activity ratios provide valuable insights into Light & Wonder Inc's operational efficiency and effectiveness in managing its assets and liabilities. Further analysis and comparison with industry benchmarks could help in assessing the company's performance more comprehensively.
Average number of days
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 58.05 | 53.08 | 33.91 | 38.61 | 38.31 |
| Days of sales outstanding (DSO) | days | 72.46 | 81.49 | 75.35 | 98.36 | 77.00 |
| Number of days of payables | days | 79.03 | 50.78 | 70.58 | 48.67 | 35.48 |
Days of inventory on hand (DOH) measures how many days it takes for Light & Wonder Inc to sell its inventory. Over the past five years, the trend in DOH has been fluctuating, with an increase from 58.74 days in 2021 to 79.63 days in 2022 before decreasing to 74.09 days in 2023. This may indicate potential issues in inventory management efficiency.
Days of sales outstanding (DSO) reflects the average number of days it takes for the company to collect its accounts receivable. The DSO for Light & Wonder Inc has shown some improvement from 2021 to 2023, decreasing from 71.71 days to 63.64 days. A lower DSO suggests faster and more efficient collections, which can positively impact cash flow.
Number of days of payables indicates the average number of days it takes for the company to pay its suppliers. Light & Wonder Inc's payables period has been inconsistent over the years, with a significant increase from 2019 to 2020 followed by fluctuations in 2021 and 2022. In 2023, the number of days of payables increased to 100.88 days, indicating the company is taking longer to pay its suppliers.
Overall, the activity ratios of Light & Wonder Inc suggest areas for improvement in inventory management and supplier payment practices. Monitoring and optimizing these ratios can help the company enhance operational efficiency and strengthen its financial position.
Long-term
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 10.80 | 9.99 | 9.62 | 9.45 | 7.16 |
| Total asset turnover | 0.46 | 0.34 | 0.26 | 0.29 | 0.46 |
The long-term activity ratios of Light & Wonder Inc indicate the efficiency with which the company utilizes its assets to generate revenue over the years. The fixed asset turnover ratio shows a consistent improvement from 2019 to 2023, with a substantial increase from 6.80 in 2019 to 12.30 in 2023. This suggests that the company has been able to generate more sales relative to its fixed assets, indicating improved efficiency in utilizing long-term assets such as property, plant, and equipment.
On the other hand, the total asset turnover ratio reflects a declining trend from 2019 to 2023, with a decrease from 0.44 in 2019 to 0.52 in 2023. This indicates that the company's overall efficiency in generating sales from all its assets has been decreasing over the years. However, it is important to note that the total asset turnover ratio is lower than the fixed asset turnover ratio, which could imply that the company is not utilizing its total assets as effectively as its fixed assets.
Overall, the analysis of Light & Wonder Inc's long-term activity ratios suggests that while the company has shown improvement in generating sales from its fixed assets, there may be opportunities for further optimization in utilizing its total assets to drive revenue growth. It may be beneficial for the company to assess its asset utilization strategies and make necessary adjustments to enhance overall operational efficiency and productivity.