La-Z-Boy Incorporated (LZB)

Short-term

Turnover ratios

La-Z-Boy Incorporated's inventory turnover ratio has been relatively stable over the reporting periods, ranging between 4.12 and 4.76. This indicates that the company is efficient in managing its inventory levels, with an average of around 4.5 times during the year.

The receivables turnover ratio has varied significantly, with values ranging from 14.84 to 19.64. This indicates that the company is efficient in collecting receivables, with an average turnover of approximately 17 times during the year.

The payables turnover ratio has also shown some fluctuation, with values between 11.64 and 16.25. This suggests that the company is managing its payables effectively, with an average turnover of around 13 times during the year.

The working capital turnover ratio has gradually decreased from 8.71 to 5.43 over the reporting periods. This indicates a decline in the company's efficiency in generating revenue from its working capital.

Overall, La-Z-Boy Incorporated has shown good efficiency in managing its inventory, receivables, and payables. However, there is a trend of decreasing efficiency in generating revenue from working capital, which may require further analysis and attention.

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Average number of days

Based on the provided data, let's analyze La-Z-Boy Incorporated's activity ratios:

1. Days of Inventory on Hand (DOH):
- The days of inventory on hand have fluctuated over the periods, ranging from a low of 75.26 days to a high of 89.58 days.
- The average DOH over the reported periods is approximately 82.25 days.
- A higher DOH indicates that La-Z-Boy holds its inventory for a longer period before selling, which may tie up capital and increase storage costs.

2. Days of Sales Outstanding (DSO):
- The days of sales outstanding show the average number of days it takes for La-Z-Boy to collect revenue from its sales.
- DSO has decreased over time, with values ranging from a high of 24.60 days to lows of around 18.59 days.
- The decreasing trend in DSO suggests that La-Z-Boy has been improving its efficiency in collecting sales revenue.

3. Number of Days of Payables:
- This ratio represents the number of days it takes for La-Z-Boy to pay its suppliers.
- The number of days of payables ranges from approximately 22.46 days to 31.35 days.
- A higher number of days of payables may indicate that La-Z-Boy takes longer to pay its suppliers, potentially improving cash flow management.

In summary, La-Z-Boy Incorporated's activity ratios indicate some variability in managing its inventory, improving efficiency in collecting sales revenue, and managing payables effectively to optimize cash flow. Monitoring these ratios over time can provide insights into the company's operational performance and financial health.

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Long-term

To analyze La-Z-Boy Incorporated's long-term activity ratios, we will focus on the Fixed Asset Turnover and Total Asset Turnover ratios.

1. Fixed Asset Turnover:
- The Fixed Asset Turnover ratio measures how efficiently the company is generating revenue from its fixed assets.
- The trend in La-Z-Boy's Fixed Asset Turnover ratio shows a general decline from April 30, 2022 (9.49) to January 27, 2024 (7.05), indicating a decrease in the company's ability to generate sales from its fixed assets.
- The ratio fluctuates with a significant drop to 2.75 on October 31, 2023, and appears as "—" for subsequent periods, indicating data unavailability.
- Overall, the decreasing trend in the Fixed Asset Turnover ratio suggests potential inefficiencies in the utilization of fixed assets to generate sales.

2. Total Asset Turnover:
- The Total Asset Turnover ratio measures the efficiency of the company in generating sales from its total assets.
- La-Z-Boy's Total Asset Turnover ratio also shows a declining trend from April 30, 2022 (1.24) to January 31, 2025 (1.07), with some fluctuations in between.
- The ratio peaks at 1.35 on October 29, 2022, then gradually declines to 1.05 by January 27, 2024, before slightly recovering to 1.08 by April 27, 2024.
- The consistency of the decline in the Total Asset Turnover ratio indicates a possible decrease in the company's overall efficiency in using its assets to generate sales.

In conclusion, the declining trends in both Fixed Asset Turnover and Total Asset Turnover ratios for La-Z-Boy Incorporated suggest potential inefficiencies in asset utilization and sales generation over the periods analyzed. Further investigation into the company's operational strategies and asset management may be warranted to address these declining efficiency ratios.