Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Ratios (Summary)
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Lowe's Cos. Inc., short-term (operating) activity ratios
Source: Based on data from Lowe's Cos. Inc. Annual Reports
| Ratio |
Description |
The company |
| Inventory turnover |
An activity ratio calculated as revenue divided by inventory. |
Lowe's Cos. Inc.'s inventory turnover improved from 2010 to 2011 and from 2011 to 2012.
|
| Payables turnover |
An activity ratio calculated as revenue divided by payables. |
Lowe's Cos. Inc.'s payables turnover increased from 2010 to 2011 and from 2011 to 2012.
|
| Working capital turnover |
An activity ratio calculated as revenue divided by working capital. |
Lowe's Cos. Inc.'s working capital turnover improved from 2010 to 2011 and from 2011 to 2012.
|
| Average inventory processing period |
An activity ratio equal to the number of days in the period divided by inventory turnover over the period. |
Lowe's Cos. Inc.'s average inventory processing period improved from 2010 to 2011 and from 2011 to 2012.
|
| Average payables payment period |
An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. |
Lowe's Cos. Inc.'s average payables payment period declined from 2010 to 2011 and from 2011 to 2012.
|
Inventory Turnover
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Source: Based on data from Lowe's Cos. Inc. Annual Reports
2012 Calculations
| Ratio |
Description |
The company |
| Inventory turnover |
An activity ratio calculated as revenue divided by inventory. |
Lowe's Cos. Inc.'s inventory turnover improved from 2010 to 2011 and from 2011 to 2012.
|
Payables Turnover
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Source: Based on data from Lowe's Cos. Inc. Annual Reports
2012 Calculations
| Ratio |
Description |
The company |
| Payables turnover |
An activity ratio calculated as revenue divided by payables. |
Lowe's Cos. Inc.'s payables turnover increased from 2010 to 2011 and from 2011 to 2012.
|
Working Capital Turnover
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Source: Based on data from Lowe's Cos. Inc. Annual Reports
2012 Calculations
| Ratio |
Description |
The company |
| Working capital turnover |
An activity ratio calculated as revenue divided by working capital. |
Lowe's Cos. Inc.'s working capital turnover improved from 2010 to 2011 and from 2011 to 2012.
|
Average Inventory Processing Period
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Source: Based on data from Lowe's Cos. Inc. Annual Reports
2012 Calculations
1 Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
| Ratio |
Description |
The company |
| Average inventory processing period |
An activity ratio equal to the number of days in the period divided by inventory turnover over the period. |
Lowe's Cos. Inc.'s average inventory processing period improved from 2010 to 2011 and from 2011 to 2012.
|
Average Payables Payment Period
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Source: Based on data from Lowe's Cos. Inc. Annual Reports
2012 Calculations
1 Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
| Ratio |
Description |
The company |
| Average payables payment period |
An estimate of the average number of days it takes a company to pay its suppliers; equal to the number of days in the period divided by payables turnover ratio for the period. |
Lowe's Cos. Inc.'s average payables payment period declined from 2010 to 2011 and from 2011 to 2012.
|
