Lamb Weston Holdings Inc (LW)
Cash conversion cycle
| May 26, 2024 | May 28, 2023 | May 29, 2022 | May 30, 2021 | May 31, 2020 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 76.91 | 75.99 | 57.26 | 58.52 | 54.81 |
| Days of sales outstanding (DSO) | days | 42.00 | 49.21 | 40.39 | 47.54 | 32.96 |
| Number of days of payables | days | 56.32 | 51.91 | 40.13 | 40.94 | 27.52 |
| Cash conversion cycle | days | 62.59 | 73.30 | 57.52 | 65.11 | 60.25 |
May 26, 2024 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 76.91 + 42.00 – 56.32
= 62.59
The cash conversion cycle for Lamb Weston Holdings Inc has fluctuated over the past five years. In May 2024, the company's cash conversion cycle decreased to 62.59 days compared to 73.30 days in May 2023. This indicates that Lamb Weston was able to convert its investments in inventory and receivables into cash more efficiently in 2024.
The trend over the past five years shows a mix of fluctuations in the cash conversion cycle. In May 2022, the cycle was at a relatively low level of 57.52 days, implying strong efficiency in managing working capital. However, the cycle increased in May 2023 and May 2021, reaching 73.30 days and 65.11 days, respectively.
In general, a lower cash conversion cycle is indicative of better working capital management, as it means the company is able to convert its investments into cash quicker. Lamb Weston should continue to monitor and potentially improve its cash conversion cycle to enhance efficiency and optimize its working capital management.
Peer comparison
May 26, 2024