La-Z-Boy Incorporated (LZB)
Cash conversion cycle
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Apr 27, 2024 | Jan 31, 2024 | Jan 27, 2024 | Oct 31, 2023 | Oct 28, 2023 | Jul 31, 2023 | Jul 29, 2023 | Apr 30, 2023 | Apr 29, 2023 | Jan 31, 2023 | Jan 28, 2023 | Oct 31, 2022 | Oct 29, 2022 | Jul 31, 2022 | Jul 30, 2022 | Apr 30, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Days of inventory on hand (DOH) | days | 89.58 | 88.01 | 82.93 | 79.99 | 81.66 | 87.71 | 88.58 | 86.76 | 85.82 | 85.20 | 81.64 | 79.66 | 76.67 | 80.53 | 78.46 | 86.38 | 82.80 | 80.68 | 81.25 | 75.26 |
| Days of sales outstanding (DSO) | days | — | — | — | — | 24.60 | — | 21.73 | — | 24.09 | — | 18.59 | — | 19.77 | — | 20.93 | — | 23.33 | — | 23.42 | — |
| Number of days of payables | days | — | — | — | — | 29.93 | — | 27.78 | — | 31.35 | — | 29.68 | — | 29.82 | — | 22.46 | — | 25.76 | — | 30.32 | — |
| Cash conversion cycle | days | 89.58 | 88.01 | 82.93 | 79.99 | 76.33 | 87.71 | 82.53 | 86.76 | 78.56 | 85.20 | 70.54 | 79.66 | 66.61 | 80.53 | 76.93 | 86.38 | 80.37 | 80.68 | 74.35 | 75.26 |
January 31, 2025 calculation
Cash conversion cycle = DOH + DSO – Number of days of payables
= 89.58 + — – —
= 89.58
The cash conversion cycle is a measure of how long it takes for a company to convert its investments in inventory and other resources into cash flows from sales. It is calculated by adding the number of days inventory is held to the number of days that receivables are outstanding, and then subtracting the number of days that payables are outstanding.
For La-Z-Boy Incorporated, the cash conversion cycle has shown some fluctuations over the period from April 2022 to January 2025. The cycle ranged from a low of 66.61 days in April 2023 to a high of 89.58 days in January 2025. Generally, a shorter cash conversion cycle is preferable as it indicates that the company is efficiently managing its working capital.
During this period, the company experienced variations in its inventory turnover, receivables collection efficiency, and payables payment speed, which influenced its cash conversion cycle. It is important for La-Z-Boy Incorporated to monitor and manage these components effectively to optimize its cash conversion cycle and maximize liquidity.
Overall, understanding and analyzing the cash conversion cycle is crucial for assessing the efficiency of La-Z-Boy Incorporated's cash flow management and working capital operations. By closely monitoring and improving this metric, the company can enhance its financial performance and strengthen its position in the market.
Peer comparison
Jan 31, 2025