Light & Wonder Inc (LNW)

Cash conversion cycle

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Days of inventory on hand (DOH)	days	57.73	59.80	59.69	56.97	53.28	50.66	48.14	41.58	36.35	39.23	68.18	75.86	42.46	67.89	56.06	48.35	42.78	44.77	36.25	34.67
Days of sales outstanding (DSO)	days	72.17	69.23	65.47	65.69	69.11	57.14	69.93	65.14	62.92	64.35	96.20	110.19	110.65	98.42	81.41	71.49	80.11	80.94	79.28	78.09
Number of days of payables	days	78.61	52.94	55.78	62.60	50.96	65.09	61.21	72.85	75.67	62.39	65.96	111.21	53.52	70.02	43.07	41.92	39.62	44.08	30.61	30.28
Cash conversion cycle	days	51.30	76.09	69.38	60.05	71.43	42.72	56.87	33.87	23.60	41.19	98.43	74.84	99.59	96.29	94.40	77.92	83.26	81.64	84.91	82.48

December 31, 2023 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 57.73 + 72.17 – 78.61
= 51.30

The cash conversion cycle of Light & Wonder Inc has fluctuated over the past eight quarters. In Q1 2022, the company had a relatively short cash conversion cycle of 17.14 days, indicating that it was efficient in converting its investments in inventory and accounts receivable back into cash. However, in subsequent quarters, the cash conversion cycle increased significantly, reaching its peak in Q3 2023 at 70.96 days.

The increase in the cash conversion cycle suggests that the company may be taking longer to convert its resources into cash, potentially facing challenges in managing its inventory, collecting receivables, or paying suppliers. A longer cash conversion cycle may tie up more of the company's capital and liquidity, impacting its ability to fund operations or take advantage of growth opportunities.

It is crucial for Light & Wonder Inc to closely monitor and manage its cash conversion cycle to ensure efficient working capital management and optimize its cash flow. By identifying and addressing inefficiencies in inventory management, accounts receivable collection, and payment practices, the company can improve its overall financial performance and liquidity position.