Lamb Weston Holdings Inc (LW)
Cash conversion cycle
| May 26, 2024 | Feb 25, 2024 | Nov 26, 2023 | Aug 27, 2023 | May 28, 2023 | Feb 26, 2023 | Nov 27, 2022 | Aug 28, 2022 | May 29, 2022 | Feb 27, 2022 | Nov 28, 2021 | Aug 29, 2021 | May 30, 2021 | Feb 28, 2021 | Nov 29, 2020 | Aug 30, 2020 | May 31, 2020 | Feb 23, 2020 | Nov 24, 2019 | Aug 25, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 76.91 | 79.91 | 79.84 | 65.68 | 75.99 | 76.71 | 78.58 | 62.59 | 57.26 | 65.17 | 63.52 | 50.49 | 58.52 | 67.11 | 74.52 | 54.40 | 54.81 | 66.47 | 71.71 | 54.10 |
| Days of sales outstanding (DSO) | days | 42.00 | 41.07 | 44.06 | 45.03 | 49.41 | 38.02 | 41.22 | 39.22 | 40.39 | 40.32 | 40.24 | 38.73 | 47.54 | 39.05 | 36.29 | 33.25 | 32.92 | 34.09 | 37.05 | 35.36 |
| Number of days of payables | days | 56.32 | 45.18 | 57.75 | 51.05 | 51.91 | 41.51 | 55.50 | 45.57 | 40.13 | 35.88 | 46.08 | 40.93 | 40.94 | 35.65 | 44.61 | 29.97 | 27.52 | 32.48 | 45.78 | 33.04 |
| Cash conversion cycle | days | 62.59 | 75.80 | 66.15 | 59.66 | 73.50 | 73.22 | 64.30 | 56.24 | 57.52 | 69.61 | 57.67 | 48.29 | 65.11 | 70.51 | 66.20 | 57.67 | 60.21 | 68.07 | 62.98 | 56.42 |
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 of Lamb Weston Holdings Inc fluctuated over the assessed periods, ranging from a low of 48.29 days to a high of 75.80 days. The company's cash conversion cycle represents the time it takes to convert raw materials into cash inflows from sales. A shorter cycle indicates more efficient operations as the company is able to quickly convert its investments in inventory back into cash.
In analyzing the data, it is observed that there is some variability in the cash conversion cycle over time, which could be influenced by factors such as changes in sales levels, inventory management practices, or payment terms with suppliers and customers. It is important for the company to closely monitor and manage its cash conversion cycle to optimize working capital efficiency and overall financial performance.
Overall, a lower cash conversion cycle suggests improved liquidity and efficient working capital management, while a higher cycle may indicate potential operational inefficiencies or delays in converting investments into cash. Lamb Weston Holdings Inc should continue to assess and fine-tune its operational processes to ensure a more consistent and optimized cash conversion cycle going forward.
Peer comparison
May 26, 2024