La-Z-Boy Incorporated (LZB)

La-Z-Boy Incorporated's liquidity position, as reflected by key ratios over recent fiscal periods, indicates a stable and improving short-term financial health.

The current ratio, which measures the company's ability to meet its short-term obligations with its total current assets, shows a gradual increase from 1.80 in April 2023 to 1.91 in April 2024 and remains steady through April 2025. This suggests a consistent enhancement in liquidity, providing a comfortable cushion to cover current liabilities and indicating sound working capital management.

The quick ratio, which excludes inventory from current assets to assess liquidity more conservatively, has demonstrated a modest upward trend. It increased from 1.00 in April 2023 to 1.09 and further to approximately 1.11-1.20 in subsequent periods. This progression signals an improved capacity to settle short-term liabilities through more liquid assets, reflecting effectively managed receivables and cash holdings.

The cash ratio, the most conservative liquidity measure focusing solely on cash and cash equivalents relative to current liabilities, shows a slight upward movement from 0.74 in April 2023 to 0.80 in April 2024, with a marginal decrease to 0.78 in April 2025. This pattern indicates that a significant portion of short-term obligations can be met with available cash, underscoring prudent cash management practices.

Overall, La-Z-Boy Incorporated's liquidity ratios depict a positive trend, with increasing capacity to meet immediate and short-term liabilities. The ratios remain within acceptable ranges for retail and manufacturing firms, highlighting maintained financial stability and prudent liquidity management over the analyzed periods.

---

Additional liquidity measure

The analysis of La-Z-Boy Incorporated's cash conversion cycle (CCC) over the specified period reveals notable fluctuations and trends. As of April 29, 2023, the CCC was recorded at 64.00 days, indicating the number of days it took for the company to convert its investments in inventory and other resources into cash flows from sales. A slight increase was observed the following day, with the cycle extending to 72.44 days on April 30, 2023, suggesting a modest elongation in the company's operating efficiency.

The cycle continued to lengthen over the subsequent year, reaching a peak of 77.05 days by April 27, 2024. This implies that the company's working capital turnover slowed somewhat, potentially due to longer inventory holding periods, extended receivables, or delays in accounts payable management. The increase from the previous year's figure signifies a shift towards less efficient cash conversion processes during this period.

By April 30, 2024, the CCC further expanded to 83.38 days, reflecting a continued trend of increased operational cycle duration. This extension could be indicative of operational challenges, shifts in sales or inventory practices, or extended customer credit terms affecting receivables collection.

However, a notable change occurred by April 30, 2025, when the cash conversion cycle decreased to 73.31 days. This reduction suggests an improvement in the company's efficiency in managing its working capital, potentially through optimizing inventory levels, accelerating receivables collection, or shortening payables.

Overall, the progression of La-Z-Boy’s cash conversion cycle demonstrates periods of operational inefficiency followed by partial recoveries. The fluctuations highlight the dynamic nature of the company's working capital management over the analyzed timeframe, with recent improvements indicating efforts to enhance cash flow and operational efficiency.