Landstar System Inc (LSTR)

Short-term

Turnover ratios

The activity ratios of Landstar System Inc provide insight into how efficiently the company is managing its assets and operations.

Receivables turnover:
- The receivables turnover ratio indicates how many times during the year the company collects its accounts receivable.
- Landstar's receivables turnover has been relatively stable over the past five years, ranging from 5.41 to 7.68.
- A higher turnover ratio suggests that Landstar is collecting its receivables more quickly, which is generally positive as it indicates efficient management of credit and collection policies.

Payables turnover:
- The payables turnover ratio measures how frequently a company pays off its suppliers.
- Landstar's payables turnover has fluctuated over the years, with a low of 0.62 in 2021 and a high of 1.04 in 2019.
- A higher payables turnover ratio typically indicates that the company is paying its suppliers more quickly, which can help maintain good relationships with suppliers and potentially negotiate better terms.

Working capital turnover:
- The working capital turnover ratio shows how efficiently the company is utilizing its working capital to generate sales.
- Landstar's working capital turnover has varied over the years, with the highest ratio in 2022 (13.25) and the lowest in 2019 (9.18).
- A higher working capital turnover ratio indicates that Landstar is generating more revenue per unit of working capital, reflecting effective management of current assets and liabilities.

Overall, based on the activity ratios analysis, Landstar System Inc appears to have effectively managed its receivables, payables, and working capital over the years, demonstrating operational efficiency and effective utilization of resources.

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Average number of days

The activity ratios of Landstar System Inc, which include days of inventory on hand (DOH), days of sales outstanding (DSO), and number of days of payables, provide insights into the efficiency of the company's operations and management of its working capital.

1. Days of Inventory on Hand (DOH):
Unfortunately, specific data for days of inventory on hand (DOH) is not available for Landstar System Inc in the provided table. DOH is a measure of how quickly a company sells through its inventory. A lower DOH indicates that the company is efficiently managing its inventory, which can lead to lower storage costs and reduced risk of obsolete inventory.

2. Days of Sales Outstanding (DSO):
Landstar System Inc's Days of Sales Outstanding (DSO) have fluctuated over the past five years, ranging from 47.50 days in 2022 to 67.49 days in 2020. DSO measures the average number of days it takes for a company to collect revenue after a sale is made. A lower DSO indicates that the company is collecting its accounts receivable more quickly, which is generally favorable as it improves cash flow and liquidity.

3. Number of Days of Payables:
The number of days of payables for Landstar System Inc has varied significantly over the years, with the highest being 585.91 days in 2021 and the lowest at 349.89 days in 2019. This ratio reflects how long a company takes to pay its suppliers. A higher number of days of payables can indicate that the company is taking longer to pay its bills, potentially preserving cash in the short term but can strain relationships with suppliers in the long run.

In conclusion, Landstar System Inc's activity ratios show a mixed performance in terms of managing its inventory, collecting receivables, and paying its obligations over the past five years. Further analysis and comparison with industry benchmarks would be necessary to provide a more detailed assessment of the company's operational efficiency and working capital management.

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Long-term

The long-term activity ratios for Landstar System Inc reflect the company's efficiency in utilizing its assets to generate revenue over the years.

Firstly, looking at the fixed asset turnover ratio, which measures how efficiently the company is using its fixed assets to generate sales, we see that the ratio has fluctuated over the past five years. In 2023, the fixed asset turnover ratio decreased to 18.65 from 23.61 in 2022, indicating a slight decline in the efficiency of using fixed assets to generate revenue. However, it is still higher than the ratios in 2021, 2020, and 2019, suggesting an overall improvement in this aspect.

Secondly, examining the total asset turnover ratio, which shows how efficiently the company is using all its assets to generate sales, we observe a similar pattern of fluctuation. The total asset turnover ratio decreased to 2.94 in 2023 from 3.85 in 2022, implying a decrease in the overall efficiency of utilizing all assets to generate revenue. Despite the decrease in 2023, the ratio is still higher than in 2021, 2020, and 2019, indicating an overall positive trend in asset utilization efficiency.

Overall, while there have been fluctuations in both the fixed asset turnover and total asset turnover ratios for Landstar System Inc, the company has generally improved its efficiency in utilizing assets to generate revenue over the past five years. However, further analysis and comparison to industry benchmarks may be necessary to fully assess Landstar's long-term asset management performance.