Lowe's Companies Inc (LOW)

Short-term

Turnover ratios

Lowe's Companies Inc has shown some fluctuations in its activity ratios over the past few quarters.

1. Inventory turnover has ranged between 4.12 and 5.27 over the last two years, indicating that Lowe's efficiently manages its inventory levels. There has been a general upward trend in inventory turnover, which could signify improved inventory management or increased sales.

2. Payables turnover has varied between 5.57 and 9.03, with an increasing trend in recent quarters. This suggests that Lowe's is taking longer to pay its suppliers, which could reflect favorable credit terms or cash flow management strategies.

3. Working capital turnover has shown significant fluctuations, ranging from 11.34 to 525.23. The substantial increase in working capital turnover in some quarters may indicate improved efficiency in generating revenue from its working capital.

Overall, the activity ratios of Lowe's reflect effective inventory management and potential improvements in working capital utilization. There are opportunities for the company to further optimize its payables turnover to enhance cash flow management.

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Average number of days

The Days of Inventory on Hand (DOH) for Lowe's Companies Inc has shown a decreasing trend from 104.33 days in February 2019 to 78.49 days in February 2024. This indicates that the company has been more efficient in managing its inventory levels over the years.

The Days of Sales Outstanding (DSO) data is not available for analysis, which could imply that the company does not have significant accounts receivable or operates on a cash-only basis.

The Number of Days of Payables for Lowe's has fluctuated over the period, ranging from 42.46 days in January 2020 to 79.74 days in August 2019. This metric measures how long the company takes to pay its suppliers. A higher number of days indicates that Lowe's is taking longer to settle payments with its suppliers, which can be interpreted as a positive for cash flow management but should be monitored to ensure good supplier relationships are maintained.

Overall, the activity ratios suggest that Lowe's Companies Inc has been improving its inventory management efficiency but may need to focus on optimizing its payables management to maintain healthy supplier relationships while managing cash flow effectively.

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See also:

Lowe's Companies Inc Short-term (Operating) Activity Ratios (Quarterly Data)

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Long-term

Lowe's Companies Inc's fixed asset turnover has shown fluctuation over the years, ranging from 3.81 to 5.56. The company's ability to generate sales from its fixed assets has remained relatively high, with a peak of 5.56 in August 2023. This indicates that Lowe's efficiently utilizes its fixed assets to generate revenue, with a trend of improvement over the past few years despite some fluctuations.

In comparison, Lowe's total asset turnover has also varied, ranging from 1.54 to 2.18. The total asset turnover ratio reflects how well the company generates sales from all its assets. Lowe's has shown a mixed performance in this aspect, with some years demonstrating higher efficiency in generating sales from its total assets.

Overall, both the fixed asset turnover and total asset turnover ratios suggest that Lowe's has been effectively managing its assets to generate revenue, with some areas showing improvement while others display fluctuation. This analysis provides insight into Lowe's long-term activity efficiency and asset utilization.

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See also:

Lowe's Companies Inc Long-term (Investment) Activity Ratios (Quarterly Data)