Light & Wonder Inc (LNW)
Solvency ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Debt-to-capital ratio | 0.00 | 0.00 | — | — | — |
| Debt-to-equity ratio | 0.00 | 0.00 | — | — | — |
| Financial leverage ratio | 7.26 | 6.07 | — | — | — |
The solvency ratios of Light & Wonder Inc reflect the firm's ability to meet its long-term financial obligations and manage debt effectively. Over the past five years, the company's debt-to-assets ratio has fluctuated, with a notable decrease from 1.17 in 2020 to 0.70 in 2023, indicating a reduction in the proportion of assets financed by debt.
Similarly, the debt-to-capital ratio also saw a decrease from 1.40 in 2020 to 0.84 in 2023, suggesting improved capital structure and reduced reliance on debt for financing operations.
The debt-to-equity ratio and financial leverage ratio show high levels of debt relative to equity and capital employed, although data is missing for certain years. Light & Wonder Inc may need to closely monitor these ratios to ensure sustainable long-term financial health. Overall, the trend towards lower debt ratios in recent years indicates a positive direction in the company's solvency position.
Coverage ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Interest coverage | 1.61 | 12.28 | 1.11 | -0.14 | 0.70 |
The interest coverage ratio for Light & Wonder Inc has shown a fluctuating trend over the past five years. Starting at 1.02 in 2019, the ratio decreased to 0.27 in 2020, indicating a significant decrease in the company's ability to cover its interest expenses with its earnings. However, there has been a gradual improvement since then, with the ratio increasing to 0.58 in 2021, 1.28 in 2022, and further to 1.97 in 2023.
An interest coverage ratio below 1 suggests that the company is not generating enough income to cover its interest expenses, indicating a higher risk of defaulting on its debt obligations. Light & Wonder Inc's ratio remained below 1 for the years 2020 and 2021, but the subsequent improvement is a positive sign of the company's increasing ability to meet its interest payments from its operating income.
Overall, the upward trend in the interest coverage ratio for Light & Wonder Inc from 2020 to 2023 indicates an improving ability to service its debt through its earnings. However, it would be beneficial for the company to continue monitoring and enhancing this ratio to ensure sustainable financial health and reduce the risk of default.