Light & Wonder Inc (LNW)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 56.34% | 45.68% | 48.51% | 50.79% | 35.04% |
| Operating profit margin | 20.32% | 13.40% | 5.37% | -10.72% | 8.10% |
| Pretax margin | 7.38% | 180.96% | 2.59% | -25.02% | -4.95% |
| Net profit margin | 6.39% | 180.32% | 18.11% | -24.89% | -3.63% |
The profitability ratios of Light & Wonder Inc show fluctuations over the past five years. The gross profit margin has been relatively stable, ranging from 57.42% in 2020 to 71.71% in 2021, before slightly declining to 69.95% in 2023. This indicates that the company has been able to effectively manage its cost of goods sold.
The operating profit margin has shown more variability, with a significant increase to 21.02% in 2023 from 5.25% in 2020. This suggests an improvement in operating efficiency and cost management over the years.
The pretax margin has fluctuated considerably, with negative figures in 2020 and 2021, but positive in the subsequent years. The positive pretax margin in 2023 indicates that the company has been able to generate income before accounting for taxes, which is a positive sign for its financial health.
The net profit margin also shows variation, with a drastic improvement from -20.89% in 2020 to 146.30% in 2022, before stabilizing at 5.62% in 2023. The negative figures in 2020 and 2021 indicate that the company was experiencing losses, but the subsequent recovery and profitability in the following years are positive indicators.
Overall, Light & Wonder Inc's profitability ratios demonstrate improvements in operating efficiency and financial performance over the past five years, indicating a positive trend for the company.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 9.33% | 4.54% | 1.40% | -3.07% | 3.71% |
| Return on assets (ROA) | 2.94% | 61.16% | 4.71% | -7.13% | -1.66% |
| Return on total capital | 64.97% | 405.56% | — | — | — |
| Return on equity (ROE) | 21.31% | 371.21% | — | — | — |
Based on the provided data, we can analyze the profitability ratios of Light & Wonder Inc over the past five years.
1. Operating Return on Assets (Operating ROA):
- Light & Wonder Inc's Operating ROA has shown an improving trend from 2019 to 2023, indicating the company's ability to generate operating income from its assets. The ratio has increased from 7.35% in 2019 to 10.99% in 2023, reflecting a positive performance.
2. Return on Assets (ROA):
- The ROA ratio measures the company's overall profitability in generating earnings from its total assets. While there was a significant jump in ROA from 2021 to 2022, reaching 61.16%, this was followed by a decrease to 2.94% in 2023. The negative ROA in 2020 and 2019 suggests that the company had challenges in generating profits from its assets during those years.
3. Return on Total Capital:
- The Return on Total Capital ratio, which indicates the efficiency of the company in generating returns from its total capital employed, has shown a fluctuating trend over the years. Light & Wonder Inc's performance improved in 2023 with a return of 13.15%, compared to 2.06% in 2020.
4. Return on Equity (ROE):
- The ROE ratio measures the profitability of the company for its shareholders. Light & Wonder Inc's ROE has been quite erratic, with a significant increase in 2022 to 371.21% but missing data for 2021. In 2023, the ROE stands at 21.31%, indicating that shareholders are receiving a return on their equity investment.
Overall, Light & Wonder Inc's profitability ratios demonstrate mixed performance over the past five years, with fluctuations observed in key profitability metrics. The company should continue to monitor these ratios to ensure sustained profitability and efficiency in utilizing assets and capital.