Light & Wonder Inc (LNW)
Activity ratios
Short-term
Turnover ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Inventory turnover | 12.95 | 6.29 | 6.88 | 10.77 | 9.45 |
| Receivables turnover | 4.95 | 5.04 | 4.48 | 4.84 | 3.71 |
| Payables turnover | 9.47 | 4.62 | 7.19 | 5.17 | 7.50 |
| Working capital turnover | 6.46 | 4.14 | 1.90 | 2.70 | 1.69 |
Light & Wonder Inc's inventory turnover indicates the number of times the company's inventory is sold and replaced over a given period. The trend in inventory turnover shows an improvement from 9.45 in 2020 to 12.95 in 2024, indicating that the company is managing its inventory more efficiently and selling products at a faster rate.
Receivables turnover measures how quickly the company collects payment from its customers. Light & Wonder Inc's receivables turnover has steadily increased from 3.71 in 2020 to 4.95 in 2024. This upward trend suggests that the company is effectively managing its accounts receivable and collecting payments in a timely manner.
Payables turnover reflects how quickly the company pays its suppliers. Light & Wonder Inc's payables turnover decreased from 7.50 in 2020 to 9.47 in 2024. A higher payables turnover indicates that the company is taking longer to pay its suppliers, potentially benefiting from more favorable credit terms or efficiently managing its cash flow.
Working capital turnover measures how efficiently the company utilizes its working capital to generate sales. Light & Wonder Inc's working capital turnover has shown significant improvement from 1.69 in 2020 to 6.46 in 2024. This increase suggests that the company is effectively using its working capital to support its operations and generate revenue.
Overall, the analysis of Light & Wonder Inc's activity ratios reveals positive trends in inventory turnover, receivables turnover, payables turnover, and working capital turnover, indicating improved efficiency in managing its resources and operations over the years.
Average number of days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 28.19 | 58.05 | 53.08 | 33.91 | 38.61 |
| Days of sales outstanding (DSO) | days | 73.81 | 72.46 | 81.49 | 75.35 | 98.36 |
| Number of days of payables | days | 38.53 | 79.03 | 50.78 | 70.58 | 48.67 |
Based on the provided data for Light & Wonder Inc, let's analyze the activity ratios:
1. Days of Inventory on Hand (DOH):
- The company's inventory turnover has fluctuated over the years. In 2020, the DOH was 38.61 days, indicating that, on average, it took 38.61 days to sell the inventory. This decreased to 33.91 days in 2021, suggesting a more efficient management of inventory.
- However, there was an increase in 2022 and 2023, with DOH reaching 53.08 days and 58.05 days, respectively. This may indicate potential issues such as overstocking or slowing sales.
- The trend reversed in 2024, with the DOH dropping to 28.19 days, implying a more effective inventory management process.
2. Days of Sales Outstanding (DSO):
- DSO measures how long it takes for the company to collect payments from its customers. Light & Wonder Inc's DSO has shown some inconsistency over the years.
- In 2020, the DSO was relatively high at 98.36 days, indicating slower collection of receivables. This improved in 2021 to 75.35 days, suggesting a more efficient accounts receivable management.
- The DSO figures for 2022, 2023, and 2024 were 81.49 days, 72.46 days, and 73.81 days, respectively. These numbers suggest a generally stable collection period over the years.
3. Number of Days of Payables:
- The number of days of payables highlights the average time the company takes to pay its suppliers. Light & Wonder Inc's payables period has shown variation annually.
- In 2020 and 2022, the days of payables were 48.67 days and 50.78 days, respectively, indicating a relatively prompt payment behavior towards suppliers.
- The days of payables increased in 2021 and 2023, reaching 70.58 days and 79.03 days, respectively. This may suggest a shift towards a longer payment cycle which could impact cash flow.
- However, there was a significant improvement in 2024, with the days of payables decreasing to 38.53 days, possibly indicating a more efficient management of payables.
Overall, analyzing the activity ratios provides insight into Light & Wonder Inc's effectiveness in managing its inventory, collecting receivables, and paying suppliers over the years. These ratios can help identify trends and potential areas for improvement in the company's operational efficiency and financial performance.
Long-term
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Fixed asset turnover | 10.12 | 10.80 | 9.99 | 9.62 | 9.45 |
| Total asset turnover | 0.53 | 0.46 | 0.34 | 0.26 | 0.29 |
The Fixed Asset Turnover ratio for Light & Wonder Inc has shown a consistent upward trend over the past five years, increasing from 9.45 in 2020 to 10.12 in 2024. This indicates that the company is generating more revenue per dollar of fixed assets invested, showcasing improved efficiency in utilizing its fixed assets to generate sales.
In terms of Total Asset Turnover, there was a decline from 0.29 in 2020 to 0.26 in 2021, suggesting that the company's total assets were not efficiently utilized to generate sales during that period. However, there was a notable improvement in the following years, with the ratio increasing to 0.53 by the end of 2024. This indicates that the company has been more effective in generating revenue compared to its total assets in recent years.
Overall, the increasing trend in Fixed Asset Turnover and the turnaround in Total Asset Turnover ratios suggest that Light & Wonder Inc has been enhancing its operational efficiency and productivity in utilizing both fixed and total assets to drive sales and generate revenue over the analyzed period.