LMW Key Ratios

LMW Ltd. experienced a significant rise in ROE from 2.59% in 2021 to 17.74% in 2023, primarily driven by an increased PAT margin which surged from 2.58% to 8.14%.The asset turnover also shows improvement, rising from 0.632 to 1.166, indicating that the company is utilizing its assets more effectively to generate sales.Leverage increased moderately during the period, peaking at 1.87 in 2023; however, a steady decrease in leverage in 2024 reflects a potential reduction in risk exposure.

LMW Ltd. showcased a significant improvement in receivable days, dropping from 30.17 days in 2021 to just 14.08 days in 2024, indicating quicker collection of payments from customers.Inventory days declined sharply from 66.92 days to around 47 days, signaling improved inventory management and lower holding costs.The cash conversion cycle remains negative and lessening over the years, from -35.62 days to -8.10 days, implying the company is effectively managing its working capital.

The increasing ROE from 2.59% to 17.74% over the four years mainly emphasizes strong equity returns, enhanced further by improvements in both ROCE and ROA.ROCE mirrored this trend, climbing from 4.15% to 23.99%, demonstrating effective use of both debt and equity in generating profits.Conversely, while ROA rose steadily from 1.63% to 9.49%, the less steep growth relative to ROCE suggests that leveraging might be contributing significantly to a robust return profile.