La-Z-Boy Incorporated (LZB)

Short-term

Turnover ratios

The activity ratios for La-Z-Boy Incorporated exhibit notable trends across the reporting periods analyzed.

Inventory Turnover has shown a decreasing trajectory over the periods observed. The ratio decreased from 5.01 and 4.85 in April 2023 to 4.43 in April 2024, with a slight uptick to 4.63 projected for April 2025. The decline implies that inventory is turning over less frequently, potentially indicating an increase in inventory holdings or slower movement of inventory through sales channels.

Receivables Turnover has experienced fluctuations, initially declining from 18.72 and 13.78 in April 2023 to 14.70 in April 2024. Notably, the ratio then decreased further to 11.72 in April 2024 before rebounding to an estimated 15.12 in April 2025. This pattern suggests periods of slower collection (reflected in the lower ratios) followed by improvements, indicating varying efficiencies in receivables management.

Payables Turnover has remained relatively stable over the periods analyzed, with minor fluctuations. The ratio has ranged narrowly between approximately 12.08 and 12.89, indicating consistent management of accounts payable and steady payment cycles with suppliers.

Working Capital Turnover has generally decreased from 6.20 in April 2023 to 5.12 in April 2024, with a slight recovery to 5.48 projected for April 2025. The decreasing trend suggests that the company is generating less sales per dollar of working capital, which could signify a slowdown in sales efficiency relative to working capital employed. The projected slight increase suggests an anticipated improvement in sales efficiency relative to working capital.

Overall, the ratios reflect a period of declining efficiency in inventory and receivables management, with steady payables management, and a slight recent improvement in working capital utilization. These trends may necessitate further examination of operational strategies to enhance turnover efficiencies.

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Average number of days

The activity ratios for La-Z-Boy Incorporated, as measured over the specified periods, indicate trends in inventory management, accounts receivable collection efficiency, and accounts payable practices.

Days of Inventory on Hand (DOH):
The DOH has increased over time, from approximately 72.82 days as of April 29, 2023, to 75.21 days on April 30, 2023, and further to 82.45 days by April 27 and 30, 2024. Although it slightly decreased to 78.78 days by April 30, 2025, it remains elevated relative to earlier periods. This upward trend suggests a lengthening of inventory turnover, potentially indicating slower inventory liquidation or increased stock levels, which could impact working capital efficiency.

Days of Sales Outstanding (DSO):
The DSO shows variability, with a notable increase from 19.50 days on April 29, 2023, to 26.48 days on April 30, 2023. Subsequently, it decreased to 24.82 days by April 27, 2024, before rising again to 31.16 days on April 30, 2024. By April 30, 2025, the DSO decreased to 24.15 days. These fluctuations reflect inconsistent receivables collection performance; periods of higher DSO indicate slower collection times, while reductions suggest improved collection efficiency. Overall, the trend in recent years appears to be cyclical rather than consistently worsening or improving.

Number of Days of Payables:
The payables period has remained relatively stable, increasing marginally from approximately 28.33 days on April 29, 2023, to around 29.62 days by April 30, 2025. This stability indicates consistent supplier payment practices, with the company maintaining its payables period within a narrow range across the analyzed timeframe.

In summary, La-Z-Boy's activity ratios reveal a pattern of increasing inventory holding periods, suggesting potential adjustments in inventory management or demand. Receivables collection times have experienced variability but show signs of improvement in recent periods. Payables practices remain stable, reflecting consistent payment policies. These ratios collectively provide insights into the company's operational efficiency and working capital management, highlighting areas for potential efficiency improvements in inventory and receivables management.

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Long-term

The analysis of La-Z-Boy Incorporated’s long-term activity ratios reveals the following insights based on the provided data:

Fixed Asset Turnover Ratio:
This ratio measures how effectively the company utilizes its fixed assets to generate sales. On April 29 and April 30, 2023, the fixed asset turnover was consistently 8.43, indicating a high level of operational efficiency in leveraging fixed assets during that period. However, by April 27, 2024, the ratio declined to 6.86, suggesting a decrease in asset productivity. This decline implies that the company gained less sales revenue per dollar of fixed assets, potentially indicating increased capital expenditure, asset underutilization, or operational inefficiencies. The absence of data beyond April 30, 2024, prevents further trend analysis, but the observed decrease signifies a potential area for review.

Total Asset Turnover Ratio:
This ratio assesses the company’s overall efficiency in using all assets to generate sales. The ratio remained steady at 1.26 for two consecutive periods ending April 30, 2023, reflecting consistent total asset utilization during that timeframe. By April 27, 2024, it decreased slightly to 1.07, indicating a reduction in overall asset efficiency. The ratio remained unchanged at 1.07 for that period and then increased marginally to 1.10 by April 30, 2025. The overall trend suggests a period of reduced asset utilization efficiency following the 2023 peak, with a gradual recovery evident in the latest data. The slight increase towards 1.10 indicates that the company may be improving its asset management, though it has not yet returned to the higher efficiency levels observed in 2023.

Summary:
Overall, La-Z-Boy’s long-term activity ratios point to a decline in asset utilization efficiency starting in 2024 compared to 2023. The fixed asset turnover experienced a notable decrease, reflecting potential challenges in asset productivity. The total asset turnover ratio also declined but shows signs of modest recovery toward the end of the observed period. These trends highlight the importance of monitoring asset management strategies to enhance operational efficiency and sales performance relative to asset base.