Landstar System Inc (LSTR)

Short-term

Turnover ratios

Landstar System Inc's activity ratios provide insights into how efficiently the company manages its assets and liabilities to generate revenue.

1. Receivables Turnover:
- Landstar System Inc's receivables turnover has been consistently improving from 5.41 in 2020 to 7.05 in 2024.
- This indicates that the company is collecting its accounts receivable more frequently, which is a positive sign of managing credit effectively and converting sales into cash efficiently.

2. Payables Turnover:
- The payables turnover ratio shows a fluctuating trend, decreasing from 0.80 in 2020 to 0.62 in 2021 but then increasing to 1.01 in 2024.
- A higher payables turnover ratio implies that the company is paying its suppliers more quickly, which may indicate good relationships with suppliers or taking advantage of discounts.

3. Working Capital Turnover:
- Landstar System Inc's working capital turnover has shown variability over the years, peaking at 13.25 in 2022 but declining to 7.45 in 2024.
- A higher working capital turnover ratio signifies that the company is efficiently using its working capital to generate revenue. The decreasing trend observed may warrant further investigation into the company's operating efficiency.

Overall, while Landstar System Inc has shown improvements in some activity ratios like receivables turnover, there are fluctuations in others like payables turnover and working capital turnover. This analysis highlights the need for continued monitoring of the company's operational efficiency and working capital management to ensure sustained financial health and growth.

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Average number of days

Based on the provided data on Landstar System Inc's activity ratios:

1. Days of Inventory on Hand (DOH):
- Unfortunately, there is no specific data available for the days of inventory on hand for Landstar System Inc for the years 2020 to 2024. Without this information, it is challenging to assess the efficiency of the company in managing its inventory turnover and liquidity.

2. Days of Sales Outstanding (DSO):
- The days of sales outstanding decreased from 67.49 days in 2020 to 64.45 days in 2021, indicating a slight improvement in collecting accounts receivable. However, there was a more significant improvement in 2022, with DSO dropping to 47.50 days, which suggests a more efficient accounts receivable management. The figures for 2023 and 2024 show a slight increase in DSO, indicating a longer time to collect sales from customers during these years.

3. Number of Days of Payables:
- The number of days of payables increased from 457.09 days in 2020 to 585.91 days in 2021, which suggests a delay in paying the company's suppliers. However, there was a significant decrease in days of payables in 2023 and 2024, indicating improved efficiency in paying off trade creditors. This trend may reflect changes in the company's working capital management policies over the years.

Overall, while there are fluctuations in Landstar System Inc's activity ratios, it is essential for the company to monitor these metrics closely to ensure effective management of inventory, accounts receivable, and accounts payable, which are crucial for maintaining liquidity and operational efficiency.

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Long-term

Landstar System Inc's long-term activity ratios reflect the efficiency of the company in utilizing its fixed assets and total assets over the years.

1. Fixed Asset Turnover:
- The fixed asset turnover ratio measures how efficiently a company generates revenue from its fixed assets. Landstar System Inc's fixed asset turnover has shown an increasing trend from 13.92 in 2020 to 23.61 in 2022, indicating that the company is generating more revenue for each dollar invested in fixed assets. However, there was a slight decrease to 18.65 in 2023 and further down to 15.48 in 2024, suggesting a potential decrease in the efficiency of utilizing fixed assets to generate revenue.

2. Total Asset Turnover:
- The total asset turnover ratio evaluates how effectively a company uses its total assets to generate revenue. Landstar System Inc's total asset turnover has also displayed a fluctuating pattern, with an increase from 2.50 in 2020 to 3.85 in 2022, before declining to 2.66 in 2024. This indicates that the company was efficiently generating sales in relation to total assets in 2022, but the efficiency decreased in subsequent years.

In summary, Landstar System Inc's long-term activity ratios suggest fluctuations in the efficiency of asset utilization over the years. It is essential for the company to further analyze the reasons behind these fluctuations and take appropriate measures to enhance productivity and maintain a sustainable level of asset turnover.