Lowe's Companies Inc (LOW)
Cash conversion cycle
| Feb 2, 2024 | Nov 3, 2023 | Aug 4, 2023 | Feb 3, 2023 | Oct 28, 2022 | Jul 29, 2022 | Apr 29, 2022 | Jan 28, 2022 | Oct 29, 2021 | Jul 30, 2021 | Apr 30, 2021 | Jan 29, 2021 | Oct 30, 2020 | Jul 31, 2020 | May 1, 2020 | Jan 31, 2020 | Nov 1, 2019 | Aug 2, 2019 | May 3, 2019 | Feb 1, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 78.49 | 74.17 | 69.31 | 74.31 | 82.46 | 84.77 | 88.64 | 76.36 | 72.98 | 75.76 | 80.41 | 73.93 | 75.23 | 70.19 | 77.59 | 73.07 | 96.80 | 95.53 | 104.33 | 87.93 |
| Days of sales outstanding (DSO) | days | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — |
| Number of days of payables | days | 40.44 | 41.94 | 41.11 | 42.20 | 50.97 | 55.40 | 60.58 | 49.24 | 49.57 | 52.53 | 61.08 | 49.69 | 61.09 | 65.54 | 58.89 | 42.46 | 62.26 | 66.09 | 79.74 | 57.95 |
| Cash conversion cycle | days | 38.05 | 32.22 | 28.20 | 32.11 | 31.49 | 29.38 | 28.07 | 27.11 | 23.40 | 23.23 | 19.33 | 24.24 | 14.14 | 4.64 | 18.70 | 30.60 | 34.54 | 29.44 | 24.59 | 29.97 |
February 2, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 78.49 + — – 40.44
= 38.05
The cash conversion cycle is a measure of how efficiently a company manages its working capital by evaluating the length of time it takes to convert its inventory into cash. Lowe's Companies Inc's cash conversion cycle fluctuated over the periods examined.
From February 2, 2024, to November 3, 2023, the cash conversion cycle increased from 32.22 days to 38.05 days, indicating a potential delay in converting inventory to cash. It then decreased to 28.20 days by August 4, 2023, suggesting improved efficiency in working capital management.
The cycle remained relatively stable around 30 days until April 29, 2022, when it decreased significantly to 14.14 days. This sharp decline could be attributed to more efficient inventory management or faster collection of receivables. Subsequently, the cycle increased to 30.60 days by January 31, 2020, reflecting a lengthened cash conversion process.
Overall, Lowe's Companies Inc has experienced fluctuations in its cash conversion cycle, indicating varying levels of efficiency in managing its working capital over the periods analyzed. Further detailed analysis would be required to identify the specific factors driving these changes and their impact on the company's financial performance.
Peer comparison
Feb 2, 2024