Light & Wonder Inc (LNW)

Inventory turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Cost of revenue	US$ in thousands	2,046,000	1,113,000	1,107,000	1,055,000	1,125,000
Inventory	US$ in thousands	158,000	177,000	161,000	98,000	119,000
Inventory turnover		12.95	6.29	6.88	10.77	9.45

December 31, 2024 calculation

Inventory turnover = Cost of revenue ÷ Inventory
= $2,046,000K ÷ $158,000K
= 12.95

Inventory turnover is a crucial financial ratio that measures how efficiently a company manages its inventory. The higher the turnover, the better the company is at selling its inventory. In the case of Light & Wonder Inc, the trend of the inventory turnover ratio over the past five years reflects fluctuations.

As of December 31, 2020, the inventory turnover ratio stood at 9.45. This indicates that the company sold and replaced its inventory approximately 9.45 times during that year. By December 31, 2021, the ratio improved to 10.77, suggesting an increase in the rate at which inventory was being sold and replenished. However, in the subsequent years, namely December 31, 2022 and December 31, 2023, the ratio declined to 6.88 and 6.29, respectively. These lower ratios may indicate potential issues such as overstocking, slow-moving inventory, or challenges in managing inventory efficiently.

On a positive note, there was a significant improvement in the inventory turnover ratio by December 31, 2024, reaching 12.95. This sharp increase suggests that the company significantly enhanced its inventory management processes, leading to a more efficient turnover of inventory.

Overall, the analysis of Light & Wonder Inc's inventory turnover ratios indicates varying levels of efficiency in managing inventory over the years. It is essential for the company to continue monitoring and improving its inventory turnover to ensure optimal utilization of resources and maintain competitiveness in the market.