Light & Wonder Inc (LNW)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 29.28% | 56.34% | 45.68% | 48.51% | 50.79% |
| Operating profit margin | 23.09% | 20.32% | 13.40% | 5.37% | -10.72% |
| Pretax margin | 14.55% | 7.38% | 180.96% | 2.59% | -25.02% |
| Net profit margin | 11.61% | 6.39% | 180.32% | 18.11% | -24.89% |
Light & Wonder Inc's profitability ratios demonstrate fluctuating performance over the past five years.
Firstly, the gross profit margin has shown a decline from 50.79% in 2020 to 29.28% in 2024. This downward trend may indicate challenges in maintaining a competitive cost structure or pricing strategy.
Secondly, the operating profit margin has improved significantly from -10.72% in 2020 to 23.09% in 2024, suggesting enhanced operational efficiency and cost control measures implemented by the company.
Thirdly, the pretax margin experienced a substantial increase from -25.02% in 2020 to 180.96% in 2022, followed by a decline in subsequent years. This sharp rise and fall may reflect one-time gains or losses impacting the company's pre-tax profitability.
Lastly, the net profit margin surged from -24.89% in 2020 to 180.32% in 2022 before stabilizing at 11.61% in 2024. While the company showed immense profitability in 2022, there was a subsequent decrease in net profit margin in the following years.
In conclusion, the analysis of Light & Wonder Inc's profitability ratios suggests mixed performance trends, requiring further investigation into the underlying factors affecting the company's financial results.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 12.32% | 9.33% | 4.54% | 1.40% | -3.07% |
| Return on assets (ROA) | 6.20% | 2.94% | 61.16% | 4.71% | -7.13% |
| Return on total capital | 112.26% | 64.97% | 405.56% | — | — |
| Return on equity (ROE) | 52.83% | 21.31% | 371.21% | — | — |
Based on the provided data, we can observe the following trends in Light & Wonder Inc's profitability ratios:
1. Operating return on assets (Operating ROA):
- Light & Wonder Inc's Operating ROA has shown a positive trend over the years, increasing from -3.07% in December 2020 to 12.32% in December 2024. This indicates that the company's operating profitability relative to its total assets has been improving steadily.
2. Return on assets (ROA):
- The company's ROA has been volatile over the years, with significant fluctuations. It was negative at -7.13% in December 2020, but improved to 6.20% by December 2024. This suggests that the company's overall profitability in relation to its total assets has been inconsistent.
3. Return on total capital:
- Light & Wonder Inc's return on total capital was not available for December 2020 and 2021. However, it saw a substantial increase to 405.56% in December 2022, indicating that the company generated significant returns for its total capital invested. The ratio decreased to 112.26% by December 2024, suggesting a potential decline in efficiency in utilizing total capital.
4. Return on equity (ROE):
- The ROE for Light & Wonder Inc was not provided for December 2020 and 2021. However, in December 2022, the ROE was notably high at 371.21%, signifying strong returns to shareholders' equity. The ratio then decreased to 52.83% by December 2024, indicating a moderation in the returns generated for shareholders.
In summary, while the company has shown improvements in its operating profitability and return on assets, there have been fluctuations in overall profitability and returns on total capital and equity. Further analysis of the company's financial performance and operational efficiency would be beneficial to understand the factors driving these trends in profitability ratios.