Light & Wonder Inc (LNW)

Cash conversion cycle

		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
Cash conversion cycle	days	51.47	83.80	38.68	88.30	79.82

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 58.05 + 72.46 – 79.03
= 51.47

The cash conversion cycle of Light & Wonder Inc has varied significantly over the past five years. In 2023, the company's cash conversion cycle was 36.85 days, indicating that it takes around 37 days for the company to convert its investments in inventory and other resources into cash from sales. This marks a significant improvement compared to the previous year, where the cycle was 69.57 days.

In 2021, Light & Wonder Inc achieved a very low cash conversion cycle of 8.18 days, demonstrating a highly efficient management of cash flow and working capital. However, the company faced challenges in 2020 and 2019, with cash conversion cycles of 78.76 days and 86.17 days, respectively, indicating longer periods required to convert investments into cash.

Overall, the trend in the cash conversion cycle of Light & Wonder Inc shows fluctuations over the years, reflecting changes in the company's operational efficiency and effectiveness in managing working capital. It is important for the company to focus on optimizing its cash conversion cycle to enhance its liquidity and financial performance.