Lowe's Companies Inc (LOW)

Cash conversion cycle

		Feb 2, 2024	Feb 3, 2023	Jan 28, 2022	Jan 29, 2021	Jan 31, 2020
Days of inventory on hand (DOH)	days	82.42	74.28	76.36	73.93	73.07
Days of sales outstanding (DSO)	days	—	—	—	—	—
Number of days of payables	days	42.46	42.18	49.24	49.69	42.46
Cash conversion cycle	days	39.95	32.10	27.11	24.24	30.60

February 2, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 82.42 + — – 42.46
= 39.95

The cash conversion cycle of Lowe's Companies Inc has shown fluctuating trends over the past five years. The company's cash conversion cycle increased to 39.95 days as of February 2, 2024, compared to 32.10 days on February 3, 2023. This indicates that it took Lowe's longer to convert its investments in inventory and accounts receivable into cash in the most recent fiscal year.

Looking back, Lowe's had a shorter cash conversion cycle of 27.11 days on January 28, 2022, and 24.24 days on January 29, 2021, reflecting efficient management of its working capital during those periods. However, the cash conversion cycle increased to 30.60 days on January 31, 2020, suggesting a temporary slowdown in cash conversion efficiency compared to the preceding years.

Overall, Lowe's may need to focus on enhancing its working capital management strategies to shorten its cash conversion cycle and improve its liquidity position in the future.