Lowe’s Cos. Inc. (NYSE:LOW)

Current Ratio

The current ratio exhibits fluctuations throughout the observed periods, ranging from a low near 1.01 to a high of approximately 1.38. Initially, the ratio decreases gradually from 1.09 in early May 2019 to a low of 1.01 by the end of January 2020, indicating a slight deterioration in short-term liquidity. Subsequently, there is a noticeable improvement starting in May 2020, with the ratio peaking at 1.38 in October 2020. After this peak, the ratio declines and stabilizes around the 1.1 to 1.25 range, reflecting moderate liquidity. Toward the latest periods in 2024 and 2025, the ratio demonstrates a gentle downward trend, approaching values slightly above 1.0, suggesting tightening liquidity but remaining above the threshold of 1, indicative of the company’s ability to meet current liabilities.

Quick Ratio

The quick ratio shows significant volatility across the periods, with values predominantly below 0.5, reflecting limited immediate liquidity in highly liquid assets excluding inventories. Early in the period, the ratio falls sharply from 0.18 in May 2019 to 0.06 by the end of 2019 and early 2020, highlighting reduced liquidity. A recovery phase occurs between May and October 2020, where the ratio ascends to 0.6 and 0.52 respectively, indicating improved liquid asset coverage. However, this increase is short-lived as the ratio declines again and fluctuates between 0.07 and 0.32 over the subsequent quarters. Towards the most recent quarters ending in mid-2024 and beyond, the quick ratio remains modest, hovering mostly below 0.3 with intermittent increases, reflecting a consistently conservative position on quick asset liquidity throughout the reporting horizon.

Cash Ratio

The cash ratio closely mirrors the quick ratio in both level and trend, ranging from a minimum around 0.06 to a maximum of 0.6. This parallelism suggests that cash and cash equivalents constitute the majority of the liquid assets accounted for in the quick ratio. The pattern exhibits an initial decline to low levels by early 2020, followed by a temporary improvement in mid to late 2020. Subsequent periods show recurring fluctuations but generally sustain low absolute values. The cash ratio in recent periods remains low yet stable, indicating conservative cash holdings relative to current liabilities and a reliance on other assets or credit facilities for liquidity needs.

The analysis of the quarterly financial data reveals fluctuations in both current assets and current liabilities over the examined periods, with corresponding variations in the current ratio.

Current Assets

Current assets exhibit a general pattern of volatility with periods of significant increases followed by declines. Initially, current assets decrease from approximately 19,335 million USD to a low of around 15,318 million USD by early 2020. A notable surge occurs in mid-2020, where current assets peak at approximately 27,717 million USD, followed by a decline and stabilization around 20,000 to 25,000 million USD in subsequent quarters. The latter periods show a slight downward trend with some recovery, ending near 22,639 million USD.

Current Liabilities

Current liabilities generally follow an upward trend with fluctuations. Starting from about 17,781 million USD, liabilities increase to a peak of around 22,892 million USD in early 2021. Following this peak, there is a gradual decrease with some oscillations, reaching a low near 15,568 million USD by early 2024. Toward the end of the period, liabilities climb again to slightly above 21,000 million USD.

Current Ratio

The current ratio, a measure of short-term liquidity, shows variability ranging from a low close to 1.01 to a high of about 1.38. Early 2020 marks the ratio's lowest point near 1.01, coinciding with the lowest current assets level. The ratio improves significantly mid-2020, peaking at 1.38, reflecting improved liquidity due to relatively higher assets compared to liabilities. Post-2021, the ratio displays moderate fluctuations with values mostly between 1.05 and 1.25, indicating a stable but modest liquidity position. Recent quarters record a decrease in the ratio toward levels near 1.05, suggesting a slight contraction in short-term solvency.

Overall, the data indicates that while current assets and liabilities have both experienced considerable volatility, efforts appear to have been made to maintain a current ratio near or above 1, signaling an ongoing capacity to meet short-term obligations. The fluctuations, particularly the peaks in mid-2020 for assets and liabilities, may relate to broader economic or operational dynamics during that period.

The analysis of the quarterly financial data reveals several notable trends in liquidity and short-term financial health.

Total Quick Assets

The total quick assets exhibit considerable volatility over the observed periods. Initially, there is a decline from 3,163 million USD in May 2019 to a low of 876 million USD in January 2020. Subsequently, a significant surge occurs in mid-2020, reaching a peak of 12,726 million USD in July 2020. After this peak, quick assets generally trend downward toward early 2021, followed by fluctuating levels ranging between approximately 1,400 million and 7,100 million USD. From early 2023 onward, total quick assets mostly stabilize within a narrower band between 1,200 million and 5,200 million USD, indicating variable but somewhat moderated liquidity availability.

Current Liabilities

Current liabilities show a generally high and relatively stable level throughout, although some fluctuation is evident. Starting at 17,781 million USD in May 2019, liabilities slightly decrease and fluctuate around the range of 15,000 to 23,000 million USD through the entire period. Notably, peaks occur in April 2021 and May 2025, with the latter reaching around 22,388 million USD. The overall pattern indicates consistently high short-term obligations relative to available quick assets.

Quick Ratio

The quick ratio, reflecting the relationship between quick assets and current liabilities, remains consistently below 1.0, signifying that quick assets cover less than the current liabilities each quarter. The ratio declines from 0.18 in May 2019 to a trough of 0.06 in November 2019 and January 2020. Then, a temporary improvement is observed, peaking at 0.6 in July 2020, corresponding to the substantial increase in quick assets during that period. However, after this peak, the ratio declines again and tends to fluctuate mostly within the 0.07 to 0.32 range, with intermittent minor improvements but no sustained upward trend. Towards the later periods in 2024 and 2025, values hover between 0.11 and 0.26, indicating persistent liquidity constraints.

In summary, the data show a pattern of volatile quick assets against consistently high current liabilities, resulting in a persistently low quick ratio. This suggests limited immediate liquidity and a potential reliance on other asset forms or financing to meet short-term obligations, particularly outside the mid-2020 period of improved liquidity. There is no clear long-term improvement in liquidity ratios, highlighting an area for potential financial attention.

The financial data over the examined quarters reveals several notable trends and patterns concerning liquidity and short-term financial positioning.

Total cash assets

The total cash assets demonstrate significant volatility across the periods. Starting at $3,163 million at the beginning of the sample, cash assets declined sharply to a low point in late 2019, with the lowest recorded value being $876 million. Following this trough, there was a substantial increase, peaking at $12,726 million in mid-2020. After this peak, cash assets fluctuated, generally trending downward but showing intermittent rises and falls. In the most recent data points, cash assets have declined again, reaching values close to or below $2,000 million, with a few rebounds observed in between.

Current liabilities

Current liabilities exhibit less volatility compared to cash assets but display a general increase over the time period. The values increased from approximately $17,781 million in early 2019 to a peak of $22,388 million recorded in early 2025. Several fluctuations are apparent, with periods of both increase and slight decrease; however, the overall trajectory is upward, indicating a growing short-term debt or obligations level.

Cash ratio

The cash ratio, reflecting liquidity by comparing cash assets to current liabilities, follows a pattern largely influenced by the movements in cash assets. Initially, the ratio is low, around 0.18, and it declines steadily to a minimum of 0.06 at the end of 2019. Shortly thereafter, it rises sharply to a peak of 0.60 in mid-2020, corresponding to the spike in cash assets. From this peak, the ratio declines again and stabilizes in the 0.1 to 0.3 range for the majority of the subsequent periods, but with occasional brief increases. In the later periods, the cash ratio remains relatively low, mostly below 0.3, indicating a modest liquidity buffer relative to current liabilities.

Overall, the data suggest that the company experienced periods of strong liquidity accumulation, notably in mid-2020, potentially indicative of strategic cash stockpiling or operational cash flow surges. However, this was followed by a period of normalization with both cash assets and cash ratio diminishing from peak levels. Meanwhile, current liabilities have generally trended upward, potentially increasing pressure on liquidity. The cash ratio remaining below 0.3 for most periods suggests that cash holdings cover less than one-third of current liabilities, highlighting a moderate reliance on other forms of current asset liquidity or short-term financing strategies.