Advance Auto Parts Inc (AAP)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Oct 7, 2023 | Sep 30, 2023 | Jul 15, 2023 | Jun 30, 2023 | Apr 22, 2023 | Mar 31, 2023 | Dec 31, 2022 | Oct 8, 2022 | Sep 30, 2022 | Jun 30, 2022 | Apr 23, 2022 | Mar 31, 2022 | Dec 31, 2021 | Oct 9, 2021 | Sep 30, 2021 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.32 | 1.34 | 1.23 | 1.22 | 1.20 | 1.21 | 1.23 | 1.24 | 1.26 | 1.23 | 1.24 | 1.11 | 1.13 | 1.13 | 1.16 | 1.20 | 1.20 | 1.21 | 1.24 | 1.24 |
| Quick ratio | 0.40 | 0.08 | 0.09 | 0.09 | 0.09 | 0.23 | 0.06 | 0.21 | 0.06 | 0.20 | 0.05 | 0.05 | 0.19 | 0.04 | 0.05 | 0.22 | 0.03 | 0.12 | 0.31 | 0.12 |
| Cash ratio | 0.40 | 0.08 | 0.09 | 0.09 | 0.09 | 0.06 | 0.06 | 0.05 | 0.06 | 0.04 | 0.05 | 0.05 | 0.04 | 0.04 | 0.05 | 0.03 | 0.03 | 0.12 | 0.12 | 0.12 |
Advance Auto Parts Inc has shown relatively consistent but declining current ratios over the analyzed periods, starting at 1.24 in September 2021 and decreasing to 1.32 by December 2024. This indicates a slight decline in the company's ability to cover its current liabilities with its current assets.
On the other hand, the quick ratio has fluctuated significantly, ranging from as low as 0.03 to as high as 0.40. This metric suggests that the company may struggle at times to meet its short-term obligations with its most liquid assets.
The cash ratio, which measures the company's ability to cover its current liabilities using only its cash and cash equivalents, has also shown fluctuations over time, indicating variability in the firm's liquidity from period to period.
Overall, while the company's current ratio indicates a generally stable liquidity position, the quick and cash ratios highlight potential fluctuations in the company's ability to quickly access cash for immediate obligations.
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Oct 7, 2023 | Sep 30, 2023 | Jul 15, 2023 | Jun 30, 2023 | Apr 22, 2023 | Mar 31, 2023 | Dec 31, 2022 | Oct 8, 2022 | Sep 30, 2022 | Jun 30, 2022 | Apr 23, 2022 | Mar 31, 2022 | Dec 31, 2021 | Oct 9, 2021 | Sep 30, 2021 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 204.88 | 234.19 | 228.60 | 220.48 | 206.78 | 67.74 | 197.10 | 70.02 | 225.41 | 73.63 | 251.85 | 262.58 | 63.16 | 224.73 | 224.16 | 64.50 | 247.80 | 224.51 | 65.38 | 193.42 |
The cash conversion cycle of Advance Auto Parts Inc has exhibited fluctuations over the periods provided. The cycle represents the time it takes for the company to convert its investments in inventory and other resources into cash inflows from sales.
Based on the data provided:
- The company's cash conversion cycle ranged from as low as 63.16 days to as high as 262.58 days over the analyzed periods.
- The cycle appears to have shown a decreasing trend in some instances, indicating potential improvements in inventory management and receivables collection.
- However, there were periods where the cash conversion cycle increased significantly, suggesting potential challenges in efficiently managing working capital.
- Monitoring and managing the cash conversion cycle is crucial for Advance Auto Parts Inc to ensure optimal utilization of resources and maintain healthy cash flows.
Overall, a thorough analysis of the company's cash conversion cycle can provide valuable insights into its operational efficiency and working capital management strategies.