Lamb Weston Holdings Inc (LW)

Short-term

Turnover ratios

Lamb Weston Holdings Inc's Inventory Turnover ratio shows the company's ability to manage its inventory efficiently. The ratio has fluctuated over the periods provided, ranging from a high of 6.11 to a low of 3.94. A higher inventory turnover ratio indicates that the company is selling its products quickly and not overstocking, which is generally favorable.

The Receivables Turnover ratio, on the other hand, indicates how well the company is collecting its receivables. The data reveals that the company had fluctuating or zero receivables turnover ratios over the periods, indicating that the company may have inconsistent or possibly delayed collection of receivables.

The Payables Turnover ratio reflects how efficiently the company is managing its payables. Lamb Weston Holdings Inc shows varying payables turnover ratios ranging from 8.26 to 5.93. A higher ratio suggests that the company is paying its suppliers more efficiently.

Lastly, the Working Capital Turnover ratio indicates how effectively the company is utilizing its working capital to generate sales. The data shows a wide range of ratios from 3.79 to 19.20, indicating significant fluctuations in the company's working capital efficiency over the periods examined.

In conclusion, Lamb Weston Holdings Inc's activity ratios reflect fluctuations in inventory management, receivables collection, payables management, and working capital efficiency over the periods provided, highlighting the importance of closely monitoring these metrics for financial performance evaluation and decision-making.

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Average number of days

Based on the provided data for Lamb Weston Holdings Inc, we can analyze the activity ratios as follows:

1. Days of Inventory on Hand (DOH):
- The DOH shows the average number of days that inventory is held before being sold.
- The trend for Lamb Weston Holdings Inc's DOH shows some fluctuations over the periods, ranging from a low of 59.69 days to a high of 92.56 days.
- Generally, a lower DOH indicates a more efficient inventory management process, as inventory is being sold more quickly.
- Lamb Weston's DOH has shown variability but appears to have increased towards the end of the period, implying a potentially lower efficiency in managing inventory levels.

2. Days of Sales Outstanding (DSO):
- The DSO ratio reflects the average number of days it takes for a company to collect payment after a sale has been made.
- Lamb Weston's DSO data shows that there are missing data points, but there have been fluctuations recorded ranging from 37.04 days to 48.26 days.
- Lower DSO values generally indicate faster collection of receivables, which is favorable for liquidity.

3. Number of Days of Payables:
- The Days of Payables metric represents the average number of days it takes for a company to pay its suppliers.
- For Lamb Weston Holdings Inc, the days of payables range from 44.19 days to 61.59 days, with missing data points for some periods.
- A higher number of days of payables suggests that the company is taking longer to pay its suppliers, which could indicate stronger cash flow management.

In conclusion, Lamb Weston's activity ratios reflect varying levels of efficiency and effectiveness in managing inventory, collecting receivables, and paying suppliers. Monitoring these ratios over time can provide insights into the company's operational performance and financial health.

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Long-term

Fixed Asset Turnover Ratio:

The fixed asset turnover ratio for Lamb Weston Holdings Inc has shown some fluctuations over the periods analyzed. It ranged between 1.75 and 2.66. This ratio indicates how efficiently the company is utilizing its fixed assets to generate sales. A higher ratio suggests that the company is effectively using its fixed assets to generate revenue. The decrease in the ratio from the higher values observed to the lower values may indicate a decrease in the company's efficiency in generating sales from its fixed assets during these periods.

Total Asset Turnover Ratio:

The total asset turnover ratio for Lamb Weston Holdings Inc has also shown variability over the periods analyzed, ranging between 0.83 and 1.05. This ratio measures the company's efficiency in generating sales from its total assets. A higher ratio indicates that the company is generating more revenue per dollar of assets. The decrease in the total asset turnover ratio over some periods may suggest a decrease in the company's ability to generate sales from its total assets efficiently.

Overall, it is important for Lamb Weston Holdings Inc to closely monitor these ratios to ensure that the company is efficiently utilizing its assets to drive revenue growth and maintain profitability.