La-Z-Boy Incorporated (LZB)
Liquidity ratios
| Apr 27, 2024 | Jan 27, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 22, 2022 | Oct 23, 2021 | Jul 24, 2021 | Apr 24, 2021 | Jan 23, 2021 | Oct 24, 2020 | Jul 25, 2020 | Apr 25, 2020 | Jan 25, 2020 | Oct 26, 2019 | Jul 27, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.91 | 1.93 | 1.95 | 1.89 | 1.80 | 1.67 | 1.56 | 1.44 | 1.41 | 1.35 | 1.42 | 1.44 | 1.51 | 1.61 | 1.62 | 1.66 | 1.79 | 1.84 | 1.77 | 1.80 |
| Quick ratio | 1.11 | 1.04 | 1.09 | 1.04 | 1.00 | 0.85 | 0.68 | 0.64 | 0.66 | 0.58 | 0.71 | 0.76 | 0.90 | 0.98 | 1.02 | 1.04 | 1.09 | 1.04 | 0.93 | 0.93 |
| Cash ratio | 0.80 | 0.77 | 0.78 | 0.79 | 0.74 | 0.58 | 0.39 | 0.40 | 0.39 | 0.35 | 0.46 | 0.54 | 0.67 | 0.75 | 0.75 | 0.82 | 0.81 | 0.57 | 0.44 | 0.48 |
La-Z-Boy Incorporated's liquidity ratios have shown some fluctuations over the past few quarters.
The current ratio has hovered around 1.80 to 1.95, indicating that the company has adequate current assets to cover its current liabilities. The ratio peaked at 1.95 in October 2023 and has generally been above 1.40, which is considered a healthy level.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has varied between 0.58 and 1.11. Although the ratio has generally been above 1.00, signifying that La-Z-Boy can meet its short-term obligations without relying on inventory, it dipped to 0.58 in January 2022, indicating potential vulnerability.
The cash ratio, which is the most conservative liquidity measure, has ranged from 0.35 to 0.82. The company's ability to cover its current liabilities with cash and cash equivalents has been relatively stable, with the ratio consistently above 0.30. However, it did experience a significant increase to 0.82 in July 2020, suggesting strong liquidity at that point.
Overall, La-Z-Boy's liquidity ratios show a generally healthy liquidity position, with the company having sufficient short-term assets to cover its short-term obligations. However, management should continue to monitor fluctuations in these ratios to ensure ongoing liquidity stability.
Additional liquidity measure
| Apr 27, 2024 | Jan 27, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 22, 2022 | Oct 23, 2021 | Jul 24, 2021 | Apr 24, 2021 | Jan 23, 2021 | Oct 24, 2020 | Jul 25, 2020 | Apr 25, 2020 | Jan 25, 2020 | Oct 26, 2019 | Jul 27, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 77.05 | 81.35 | 74.76 | 67.21 | 64.37 | 73.55 | 81.07 | 74.29 | 78.91 | 81.79 | 79.12 | 72.73 | 77.79 | 77.17 | 69.83 | 70.30 | 68.14 | 76.67 | 77.98 | 74.38 |
The cash conversion cycle measures the efficiency of a company in converting its resources into cash. A longer cash conversion cycle indicates that the company takes more time to turn its investments into cash, potentially signaling inefficiencies in managing its working capital.
Analyzing the data for La-Z-Boy Incorporated over the past few quarters, we observe fluctuations in the cash conversion cycle. The cycle ranged from a low of 64.37 days to a high of 81.79 days, with an average around 75 days.
A shorter cash conversion cycle is generally preferable as it indicates quicker cash flow generation. In this case, the company's cycle has varied, suggesting potential challenges in managing its working capital efficiency.
It's important for La-Z-Boy to closely monitor and optimize its cash conversion cycle to ensure that it is efficiently managing its inventory, receivables, and payables. By doing so, the company can enhance its operational performance and strengthen its overall financial health.