La-Z-Boy Incorporated (LZB)
Cash conversion cycle
| Apr 30, 2025 | Apr 30, 2024 | Apr 27, 2024 | Apr 30, 2023 | Apr 29, 2023 | ||
|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 78.78 | 82.45 | 82.45 | 75.21 | 72.82 |
| Days of sales outstanding (DSO) | days | 24.15 | 31.16 | 24.82 | 26.48 | 19.50 |
| Number of days of payables | days | 29.62 | 30.22 | 30.22 | 29.25 | 28.33 |
| Cash conversion cycle | days | 73.31 | 83.38 | 77.05 | 72.44 | 64.00 |
April 30, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 78.78 + 24.15 – 29.62
= 73.31
The analysis of La-Z-Boy Incorporated’s cash conversion cycle (CCC) over the given periods reveals notable fluctuations in liquidity management efficiency. As of April 29, 2023, the CCC was 64.00 days, indicating the average number of days it takes for the company to convert its investments in inventory and receivables into cash, minus the period it holds its payables. The subsequent data point on April 30, 2023, shows an increase to 72.44 days, suggesting a slowdown in collection or inventory turnover relative to accounts payable payment terms.
The trend continues to evolve into the following year, with the CCC reaching 77.05 days on April 27, 2024. This upward movement implies that the company’s cycle lengthened, possibly due to extended receivables collection periods, slower inventory turnover, or a combination of both factors. The increase reflects a relative deterioration in operational efficiency or a strategic shift in credit and inventory policies.
By April 30, 2024, the CCC further expanded to 83.38 days, signifying a continued elongation of the cycle. Such a trend might impact liquidity and working capital management, as the company takes longer to convert resources into cash.
In the subsequent period, ending April 30, 2025, the CCC decreased to 73.31 days. This reduction indicates an improvement in cash flow efficiency, possibly through faster receivables collection, improved inventory management, or lengthened payables deferral. This shift suggests efforts to optimize operational processes or strategic adjustments aimed at reducing the cash conversion period.
Overall, the data demonstrates variability in La-Z-Boy’s cash conversion cycle, with periods of extension followed by partial recovery. The trend underscores the importance of monitoring these components—receivables, inventory, and payables—to maintain optimal liquidity positions. The cyclical nature of these changes may reflect changes in market conditions, company policy adjustments, or operational improvements.
Peer comparison
Apr 30, 2025