Light & Wonder Inc (LNW)
Liquidity ratios
| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 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 | 2.11 | 1.58 | 2.16 | 1.37 |
| Quick ratio | 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 | 1.39 | 1.07 | 1.51 | 1.09 |
| Cash ratio | 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 | 0.41 | 0.35 | 0.50 | 0.68 |
Light & Wonder Inc's liquidity ratios paint a picture of the company's ability to meet its short-term financial obligations. The current ratio, which measures the company's ability to pay off current liabilities with current assets, has shown fluctuations over the quarters analyzed. It ranged from a low of 1.39 in Q2 2022 to a high of 3.01 in Q2 2023. This indicates that the company has varied levels of liquidity over time.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also demonstrates fluctuations. It ranged from 1.12 in Q1 2022 to 2.61 in Q2 2023. This ratio provides insight into the company's ability to pay off short-term obligations without relying on selling inventory.
Lastly, the cash ratio, which is the most conservative liquidity measure as it only considers cash and cash equivalents, ranged from 0.65 in Q1 2022 to 1.74 in Q3 2023. This ratio indicates the company's ability to cover its current liabilities with its most liquid assets.
Overall, Light & Wonder Inc's liquidity ratios have shown variability over the quarters, with some showing strong liquidity positions and others indicating potential liquidity challenges. It is important for the company to assess its liquidity management strategies to ensure it can meet its short-term obligations consistently.
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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 |
Light & Wonder Inc's cash conversion cycle has exhibited fluctuations over the past eight quarters. The cash conversion cycle, which represents the time it takes for a company to convert its investments in inventory and accounts receivable into cash inflows from sales, ranged from a low of 17.14 days in Q1 2022 to a high of 72.05 days in Q2 2023.
The cash conversion cycle trended downwards from Q1 2022 to Q2 2022, indicating an improvement in the company's efficiency in managing its working capital. However, from Q2 2022 onwards, the cash conversion cycle increased significantly, reaching its peak in Q2 and Q3 2023.
A shorter cash conversion cycle generally indicates that the company is able to quickly generate cash from its operating activities. Conversely, a longer cycle suggests inefficiencies in managing inventory, collecting receivables, or paying suppliers.
The significant increase in the cash conversion cycle in Q2 and Q3 2023 may raise concerns about the company's working capital management efficiency. It is important for Light & Wonder Inc to analyze the reasons behind this trend and take necessary steps to optimize its cash conversion cycle to ensure healthy liquidity and operational efficiency.