Light & Wonder Inc (LNW)

Liquidity ratios

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Current ratio 1.61 1.88 1.85 1.98 1.88 2.78 3.01 2.74 2.72 2.55 1.39 1.89 1.78 2.28 2.59 2.43 2.62 2.68 1.78 2.04
Quick ratio 1.06 1.36 1.29 1.41 1.34 2.21 2.44 2.16 2.20 2.12 1.07 1.00 1.03 1.42 2.01 1.83 1.96 2.02 1.29 1.30
Cash ratio 0.27 0.51 0.46 0.66 0.61 1.44 1.58 1.45 1.47 1.59 0.74 0.54 0.60 0.93 1.19 1.11 1.22 1.23 0.73 0.45

Based on the provided data for Light & Wonder Inc, the liquidity ratios have fluctuated over the reporting periods.

1. Current Ratio: The current ratio measures the company's ability to meet short-term obligations with its current assets. Light & Wonder Inc's current ratio ranged from a low of 1.39 on June 30, 2022, to a high of 3.01 on June 30, 2023. Generally, a current ratio above 2 is considered healthy, indicating the company has sufficient current assets to cover its current liabilities. The company's current ratio varied over the periods, with the lowest ratio being 1.39 and the highest being 3.01.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity as it excludes inventory from current assets. Light & Wonder Inc's quick ratio varied from a low of 1.00 on March 31, 2022, to a high of 2.44 on June 30, 2023. A quick ratio above 1 is usually considered favorable, implying that the company can settle its current liabilities without relying on the sale of inventory.

3. Cash Ratio: The cash ratio indicates the proportion of current liabilities that can be covered by the company's cash and cash equivalents. Light & Wonder Inc's cash ratio fluctuated from a low of 0.27 on December 31, 2024, to a high of 1.59 on September 30, 2022. A cash ratio above 1 suggests that the company can cover all its current liabilities with cash alone, which reflects a strong liquidity position.

Overall, while Light & Wonder Inc's liquidity ratios have varied throughout the reporting periods, the company generally maintained adequate liquidity levels to meet its short-term obligations. However, it is essential to monitor these ratios continuously to ensure the company's liquidity remains stable and sufficient to support its operations.

Additional liquidity measure

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Cash conversion cycle days 63.64 68.66 45.54 57.46 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

The cash conversion cycle for Light & Wonder Inc has shown some variability over the past few years. In March 2020, the company had a cash conversion cycle of 77.92 days, which increased steadily to reach a peak of 99.59 days by December 2020. This indicates that it took the company nearly 100 days to convert its investments in inventory and accounts receivable into cash.

Subsequently, the cash conversion cycle started to decrease, reaching a low of 23.60 days by December 2021, showing significant improvement in efficiently managing its working capital. However, the cycle increased again in the following quarters but remained below the levels seen in 2020.

Throughout the period under review, Light & Wonder Inc demonstrated fluctuations in its cash conversion cycle, indicating varying efficiency in managing its cash flows, inventory, and receivables. The company should continue to closely monitor and optimize its working capital management to ensure smooth operations and maximize cash flow efficiency.