Lamb Weston Holdings Inc (LW)
Cash conversion cycle
| May 31, 2025 | May 31, 2024 | May 26, 2024 | May 31, 2023 | May 28, 2023 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 74.80 | 88.41 | 76.91 | 86.81 | 75.99 |
| Days of sales outstanding (DSO) | days | 44.22 | 41.97 | 42.00 | 49.40 | 49.21 |
| Number of days of payables | days | 44.53 | 64.74 | 56.32 | 59.30 | 51.91 |
| Cash conversion cycle | days | 74.49 | 65.63 | 62.59 | 76.92 | 73.30 |
May 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 74.80 + 44.22 – 44.53
= 74.49
The provided data indicates that Lamb Weston Holdings Inc.'s cash conversion cycle (CCC) has experienced fluctuations over the specified periods, reflecting changes in the company's operational efficiency and working capital management.
As of May 28, 2023, the CCC stood at approximately 73.30 days, which slightly decreased to 76.92 days by May 31, 2023. This suggests a modest increase in the duration it takes for the company to convert its investments in inventory and receivables into cash, possibly indicating slight delays in receivables collection or inventory turnover during this timeframe.
Moving forward to May 26, 2024, the CCC decreased notably to around 62.59 days, signifying an improvement in the company's cash conversion efficiency. This reduction implies that Lamb Weston was able to shorten the cycle, possibly through quicker receivables collection, more efficient inventory management, or extended payables terms.
However, the subsequent period up to May 31, 2024, saw a slight increase to approximately 65.63 days, and by May 31, 2025, the CCC rose again to roughly 74.49 days. These increases could reflect a slowdown in collection processes, inventory buildup, or changes in payables policies, indicating some cyclical or operational challenges that affected working capital management.
Overall, these movements suggest that Lamb Weston Holdings Inc. has experienced periods of operational efficiency improvements followed by slight regressions. The fluctuations highlight the importance of efficient working capital management in maintaining a stable and optimized cash conversion cycle. The general trend indicates a cycle primarily ranging between approximately 62.59 days and 76.92 days over the observed periods, with the recent figure approaching the higher end of this range.
Peer comparison
May 31, 2025