Lowe’s Cos. Inc. (NYSE:LOW)

Current Ratio

The current ratio exhibits moderate fluctuations over the reported periods. Initially, there is a gradual increase from 1.2 to a peak of 1.38 by October 2020. This is followed by a downward adjustment to a low near 1.02 in early 2022. Subsequently, the ratio recovers, reaching values around 1.25 by mid-2023, but then experiences a consistent decline through 2024 and into late 2025, settling slightly above 1.0. Overall, the trend indicates periods of strengthening and weakening liquidity, with the company maintaining a current ratio generally close to or just above the benchmark of 1.0, suggesting a relatively stable ability to cover short-term liabilities with current assets.

Quick Ratio

The quick ratio shows significant variability, starting at 0.34 and rising sharply to 0.6 by mid-2020, followed by a slight decline to the 0.28-0.32 range through early 2021. A marked drop occurs early in 2022, reaching a low of 0.07, indicating a reduced proportion of liquid assets excluding inventories. Some recovery is observed mid-2022 to mid-2023, fluctuating between 0.09 and 0.26, yet the ratio remains well below 1 throughout, which could imply reliance on inventory for liquidity. The ratio generally remains volatile, suggesting instability or changing composition in liquid current assets relative to current liabilities.

Cash Ratio

The cash ratio closely mirrors the quick ratio trends, starting at 0.34, rising to 0.6 in mid-2020, then declining to 0.07 by early 2022. This metric also shows a pattern of partial recovery and frequent fluctuations between 0.05 and 0.26 in subsequent quarters through 2025. The low absolute levels reflect a cautious or limited level of cash and cash equivalents relative to current liabilities, signaling conservative cash holdings or operational cash management strategies. The persistent low cash ratio relative to current liabilities underscores potential liquidity risk if current liabilities were to demand immediate settlement without reliance on converting other current assets.

Trend in Current Assets

Current assets exhibit fluctuations over the periods observed. Initial values show a rise from 21,926 million USD to 27,717 million USD between May and July 2020. However, a decline follows, stabilizing around the 22,000–25,000 million USD range in subsequent quarters. Notably, a downward trend is apparent from early 2023, decreasing to approximately 20,220 million USD by October 2025. The data reflects some volatility, but overall, current assets appear to diminish gradually toward the later periods.

Trend in Current Liabilities

Current liabilities experience a general increase in early periods, rising from 18,325 million USD in May 2020 to a high of approximately 22,892 million USD in April 2021. Following this peak, liabilities fluctuate but maintain a relatively elevated level above 19,000 million USD for most subsequent quarters. From early 2024 onward, there is a slight decrease, with liabilities settling near 19,451 million USD by October 2025. This pattern indicates heightened short-term obligations in the mid-term, with a modest easing closer to the end of the timeline.

Current Ratio Analysis

The current ratio starts at 1.2 in May 2020 and improves marginally to 1.38 by October 2020, suggesting a stronger liquidity position during that interval. After October 2020, the ratio declines to approximately 1.02 by January 2022, indicating weakening short-term financial health. Thereafter, the current ratio oscillates between 1.1 and 1.26 for the next several quarters, showing some recovery and stabilization efforts. However, starting in early 2024, a declining trend resumes, with the ratio reducing to about 1.04 by October 2025, implying tighter liquidity conditions towards the end of the period.

Overall Insights

The financial data reveals a company experiencing variable liquidity over five years. Early improvements in current assets and liquidity ratios gave way to a gradual decline in both assets and liquidity measures. Although current liabilities peaked mid-period, they moderately decreased later, but not sufficiently to offset the reduction in current assets. The current ratio's decline from peak levels suggests increasing challenges in meeting short-term obligations with available assets. The trends indicate the need for ongoing monitoring of working capital management and potential strategic adjustments to sustain liquidity.

The analysis of the quarterly financial data reveals notable fluctuations and trends in liquidity indicators over the observed periods.

Total Quick Assets

The total quick assets experienced significant variability, with values initially peaking at 12,726 million USD in the second quarter of 2020 before declining sharply to as low as 1,228 million USD in the first quarter of 2024. Although there were some intermittent recoveries, overall, the trend indicates a downward movement with sporadic increases. The asset levels showed some resilience in mid to late 2024 but continued to fluctuate without establishing a clear upward trajectory.

Current Liabilities

Current liabilities showed a generally high and somewhat stable range, fluctuating between approximately 15,500 million and 23,800 million USD. The liabilities peaked around 22,892 million USD in the second quarter of 2021 but showed a mild decline afterward, bottoming near 15,568 million USD in the first quarter of 2024. The data suggest a relatively large short-term obligation burden maintained through most quarters, with no significant trend of reduction or increase.

Quick Ratio

The quick ratio values consistently remained below 1, indicating that quick assets were always insufficient to fully cover current liabilities within each analyzed period. The ratio started at 0.34 in early 2020, briefly increased to 0.60, but subsequently declined sharply to a low of 0.07 in early 2022. Minor improvements followed, peaking at 0.26 in mid-2024; however, the quick ratio continued to demonstrate volatility, generally indicating tight liquidity conditions. The persistent low ratio emphasizes potential challenges in meeting short-term obligations solely with liquid assets.

Overall, the patterns in liquidity metrics emphasize constrained quick asset availability relative to liabilities throughout the period. Large and somewhat stable current liabilities juxtaposed with fluctuating but generally low quick assets suggest ongoing pressure on liquidity. Despite occasional rebounds in total quick assets and the quick ratio, the company appears to have faced continuous challenges in maintaining strong short-term financial flexibility.

Total Cash Assets

Total cash assets demonstrate significant volatility throughout the periods analyzed. Initially, cash assets increased markedly from approximately 6.16 billion USD in May 2020 to a peak of around 12.73 billion USD in July 2020, followed by a notable decline back to about 5.20 billion USD by January 2021. The period after oscillates with several peaks and troughs, showing intermittent recoveries such as in July 2021 and April 2022, but the overall trend appears to be downward with a few sharp drops, most notably in January 2022 and November 2024, where cash assets fell to roughly 1.40 billion USD and 1.03 billion USD respectively. This pattern suggests periodic liquidity fluctuations which might be related to operational cycles or strategic financial decisions.

Current Liabilities

Current liabilities generally fluctuate over the periods but remain within a range of approximately 15.57 billion USD to 22.89 billion USD. After starting at around 18.33 billion USD in May 2020, there is a progressive increase reaching its highest point in April 2021 at roughly 22.89 billion USD. Following this peak, current liabilities tend to oscillate but without a clear directional trend, demonstrating periods of both decline and increase in subsequent quarters. The data suggests consistent short-term obligations with no significant downward or upward movement sustained over time, indicating stable but relatively high levels of current liabilities throughout the period.

Cash Ratio

The cash ratio shows a declining trend over time, with occasional modest recoveries. Starting at 0.34 in May 2020, it reached its highest value of 0.60 in July 2020, indicating a strong liquidity position relative to current liabilities early in the period. However, following this peak, the ratio trends downward, reaching a low of 0.05 in November 2024, which signifies a much lower level of cash coverage against current liabilities. This consistent decline implies a reduction in liquid cash holdings relative to short-term obligations, potentially signaling tighter liquidity management or increased utilization of cash reserves over time. Periodic minor rises occur, but the prevailing trend suggests growing liquidity pressure.