Stock Analysis on Net

Lowe’s Cos. Inc. (NYSE:LOW)

Analysis of Short-term (Operating) Activity Ratios

Microsoft Excel

Short-term Activity Ratios (Summary)

Lowe’s Cos. Inc., short-term (operating) activity ratios

Microsoft Excel
Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020 Feb 1, 2019 Feb 2, 2018
Turnover Ratios
Inventory turnover 3.50 3.65 3.71 3.73 3.85 3.97
Receivables turnover
Payables turnover 6.16 5.65 5.51 6.42 5.85 6.86
Working capital turnover 50.26 245.54 24.92 530.50 101.51
Average No. Days
Average inventory processing period 104 100 98 98 95 92
Add: Average receivable collection period
Operating cycle
Less: Average payables payment period 59 65 66 57 62 53
Cash conversion cycle

Based on: 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01), 10-K (reporting date: 2018-02-02).

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Lowe’s Cos. Inc. inventory turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Lowe’s Cos. Inc. payables turnover ratio increased from 2021 to 2022 and from 2022 to 2023.
Working capital turnover An activity ratio calculated as revenue divided by working capital. Lowe’s Cos. Inc. working capital turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Short-term activity 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. number of days of inventory outstanding deteriorated from 2021 to 2022 and from 2022 to 2023.
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. number of days of payables outstanding decreased from 2021 to 2022 and from 2022 to 2023.

Inventory Turnover

Lowe’s Cos. Inc., inventory turnover calculation, comparison to benchmarks

Microsoft Excel
Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020 Feb 1, 2019 Feb 2, 2018
Selected Financial Data (US$ in millions)
Cost of sales 64,802 64,194 60,025 49,205 48,401 45,210
Merchandise inventory, net 18,532 17,605 16,193 13,179 12,561 11,393
Short-term Activity Ratio
Inventory turnover1 3.50 3.65 3.71 3.73 3.85 3.97
Benchmarks
Inventory Turnover, Competitors2
Amazon.com Inc. 9.15 8.40 8.34 9.80 8.08
Home Depot Inc. 4.20 4.55 5.25 5.00 5.10
TJX Cos. Inc. 6.21 5.82 5.66 6.13 6.08 6.09
Inventory Turnover, Sector
Consumer Discretionary Distribution & Retail 6.18 6.10 6.36 6.83 6.07
Inventory Turnover, Industry
Consumer Discretionary 7.06 6.74 7.06 7.55 7.84

Based on: 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01), 10-K (reporting date: 2018-02-02).

1 2023 Calculation
Inventory turnover = Cost of sales ÷ Merchandise inventory, net
= 64,802 ÷ 18,532 = 3.50

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Inventory turnover An activity ratio calculated as cost of goods sold divided by inventory. Lowe’s Cos. Inc. inventory turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Receivables Turnover

Lowe’s Cos. Inc., receivables turnover calculation, comparison to benchmarks

Microsoft Excel
Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020 Feb 1, 2019 Feb 2, 2018
Selected Financial Data (US$ in millions)
Net sales 97,059 96,250 89,597 72,148 71,309 68,619
Accounts receivable
Short-term Activity Ratio
Receivables turnover1
Benchmarks
Receivables Turnover, Competitors2
Amazon.com Inc. 16.86 19.32 23.26 26.09 22.26
Home Depot Inc. 47.45 44.12 44.15 52.34 55.89
TJX Cos. Inc. 88.70 93.79 69.69 108.00 112.54 109.62
Receivables Turnover, Sector
Consumer Discretionary Distribution & Retail 23.15 26.52 30.59 35.28 33.53
Receivables Turnover, Industry
Consumer Discretionary 17.99 18.02 21.14 21.80 21.73

Based on: 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01), 10-K (reporting date: 2018-02-02).

1 2023 Calculation
Receivables turnover = Net sales ÷ Accounts receivable
= 97,059 ÷ 0 =

2 Click competitor name to see calculations.


Payables Turnover

Lowe’s Cos. Inc., payables turnover calculation, comparison to benchmarks

Microsoft Excel
Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020 Feb 1, 2019 Feb 2, 2018
Selected Financial Data (US$ in millions)
Cost of sales 64,802 64,194 60,025 49,205 48,401 45,210
Accounts payable 10,524 11,354 10,884 7,659 8,279 6,590
Short-term Activity Ratio
Payables turnover1 6.16 5.65 5.51 6.42 5.85 6.86
Benchmarks
Payables Turnover, Competitors2
Amazon.com Inc. 3.59 3.63 3.46 3.22 3.51
Home Depot Inc. 9.14 7.45 7.52 9.33 9.16
TJX Cos. Inc. 9.53 7.77 5.09 11.17 10.53 10.25
Payables Turnover, Sector
Consumer Discretionary Distribution & Retail 4.61 4.48 4.19 4.25 4.75
Payables Turnover, Industry
Consumer Discretionary 5.23 4.84 4.67 4.77 5.59

Based on: 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01), 10-K (reporting date: 2018-02-02).

1 2023 Calculation
Payables turnover = Cost of sales ÷ Accounts payable
= 64,802 ÷ 10,524 = 6.16

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Payables turnover An activity ratio calculated as cost of goods sold divided by payables. Lowe’s Cos. Inc. payables turnover ratio increased from 2021 to 2022 and from 2022 to 2023.

Working Capital Turnover

Lowe’s Cos. Inc., working capital turnover calculation, comparison to benchmarks

Microsoft Excel
Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020 Feb 1, 2019 Feb 2, 2018
Selected Financial Data (US$ in millions)
Current assets 21,442 20,060 22,326 15,318 14,228 12,772
Less: Current liabilities 19,511 19,668 18,730 15,182 14,497 12,096
Working capital 1,931 392 3,596 136 (269) 676
 
Net sales 97,059 96,250 89,597 72,148 71,309 68,619
Short-term Activity Ratio
Working capital turnover1 50.26 245.54 24.92 530.50 101.51
Benchmarks
Working Capital Turnover, Competitors2
Amazon.com Inc. 77.32 24.33 60.82 32.92
Home Depot Inc. 16.81 417.56 24.87 76.81 59.68
TJX Cos. Inc. 23.22 17.40 6.51 23.97 13.27 10.67
Working Capital Turnover, Sector
Consumer Discretionary Distribution & Retail 42.11 21.83 63.17 38.37
Working Capital Turnover, Industry
Consumer Discretionary 16.27 19.61 11.06 13.40 33.38

Based on: 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01), 10-K (reporting date: 2018-02-02).

1 2023 Calculation
Working capital turnover = Net sales ÷ Working capital
= 97,059 ÷ 1,931 = 50.26

2 Click competitor name to see calculations.

Short-term activity ratio Description The company
Working capital turnover An activity ratio calculated as revenue divided by working capital. Lowe’s Cos. Inc. working capital turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Average Inventory Processing Period

Lowe’s Cos. Inc., average inventory processing period calculation, comparison to benchmarks

Microsoft Excel
Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020 Feb 1, 2019 Feb 2, 2018
Selected Financial Data
Inventory turnover 3.50 3.65 3.71 3.73 3.85 3.97
Short-term Activity Ratio (no. days)
Average inventory processing period1 104 100 98 98 95 92
Benchmarks (no. days)
Average Inventory Processing Period, Competitors2
Amazon.com Inc. 40 43 44 37 45
Home Depot Inc. 87 80 70 73 72
TJX Cos. Inc. 59 63 65 60 60 60
Average Inventory Processing Period, Sector
Consumer Discretionary Distribution & Retail 59 60 57 53 60
Average Inventory Processing Period, Industry
Consumer Discretionary 52 54 52 48 47

Based on: 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01), 10-K (reporting date: 2018-02-02).

1 2023 Calculation
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ 3.50 = 104

2 Click competitor name to see calculations.

Short-term activity 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. number of days of inventory outstanding deteriorated from 2021 to 2022 and from 2022 to 2023.

Average Receivable Collection Period

Lowe’s Cos. Inc., average receivable collection period calculation, comparison to benchmarks

Microsoft Excel
Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020 Feb 1, 2019 Feb 2, 2018
Selected Financial Data
Receivables turnover
Short-term Activity Ratio (no. days)
Average receivable collection period1
Benchmarks (no. days)
Average Receivable Collection Period, Competitors2
Amazon.com Inc. 22 19 16 14 16
Home Depot Inc. 8 8 8 7 7
TJX Cos. Inc. 4 4 5 3 3 3
Average Receivable Collection Period, Sector
Consumer Discretionary Distribution & Retail 16 14 12 10 11
Average Receivable Collection Period, Industry
Consumer Discretionary 20 20 17 17 17

Based on: 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01), 10-K (reporting date: 2018-02-02).

1 2023 Calculation
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =

2 Click competitor name to see calculations.


Operating Cycle

Lowe’s Cos. Inc., operating cycle calculation, comparison to benchmarks

No. days

Microsoft Excel
Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020 Feb 1, 2019 Feb 2, 2018
Selected Financial Data
Average inventory processing period 104 100 98 98 95 92
Average receivable collection period
Short-term Activity Ratio
Operating cycle1
Benchmarks
Operating Cycle, Competitors2
Amazon.com Inc. 62 62 60 51 61
Home Depot Inc. 95 88 78 80 79
TJX Cos. Inc. 63 67 70 63 63 63
Operating Cycle, Sector
Consumer Discretionary Distribution & Retail 75 74 69 63 71
Operating Cycle, Industry
Consumer Discretionary 72 74 69 65 64

Based on: 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01), 10-K (reporting date: 2018-02-02).

1 2023 Calculation
Operating cycle = Average inventory processing period + Average receivable collection period
= 104 + =

2 Click competitor name to see calculations.


Average Payables Payment Period

Lowe’s Cos. Inc., average payables payment period calculation, comparison to benchmarks

Microsoft Excel
Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020 Feb 1, 2019 Feb 2, 2018
Selected Financial Data
Payables turnover 6.16 5.65 5.51 6.42 5.85 6.86
Short-term Activity Ratio (no. days)
Average payables payment period1 59 65 66 57 62 53
Benchmarks (no. days)
Average Payables Payment Period, Competitors2
Amazon.com Inc. 102 101 105 113 104
Home Depot Inc. 40 49 49 39 40
TJX Cos. Inc. 38 47 72 33 35 36
Average Payables Payment Period, Sector
Consumer Discretionary Distribution & Retail 79 81 87 86 77
Average Payables Payment Period, Industry
Consumer Discretionary 70 75 78 76 65

Based on: 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01), 10-K (reporting date: 2018-02-02).

1 2023 Calculation
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ 6.16 = 59

2 Click competitor name to see calculations.

Short-term activity 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. number of days of payables outstanding decreased from 2021 to 2022 and from 2022 to 2023.

Cash Conversion Cycle

Lowe’s Cos. Inc., cash conversion cycle calculation, comparison to benchmarks

No. days

Microsoft Excel
Feb 3, 2023 Jan 28, 2022 Jan 29, 2021 Jan 31, 2020 Feb 1, 2019 Feb 2, 2018
Selected Financial Data
Average inventory processing period 104 100 98 98 95 92
Average receivable collection period
Average payables payment period 59 65 66 57 62 53
Short-term Activity Ratio
Cash conversion cycle1
Benchmarks
Cash Conversion Cycle, Competitors2
Amazon.com Inc. -40 -39 -45 -62 -43
Home Depot Inc. 55 39 29 41 39
TJX Cos. Inc. 25 20 -2 30 28 27
Cash Conversion Cycle, Sector
Consumer Discretionary Distribution & Retail -4 -7 -18 -23 -6
Cash Conversion Cycle, Industry
Consumer Discretionary 2 -1 -9 -11 -1

Based on: 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01), 10-K (reporting date: 2018-02-02).

1 2023 Calculation
Cash conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= 104 + 59 =

2 Click competitor name to see calculations.