Abercrombie & Fitch Company (ANF)

Abercrombie & Fitch Company's liquidity ratios provide insight into the company's ability to meet its short-term financial obligations. The current ratio, which measures the company's ability to cover its current liabilities with its current assets, has shown some fluctuations over the past five years. The ratio has improved in 2024 compared to the previous year, indicating that the company's current assets are better able to cover its current liabilities.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity as it excludes inventory from current assets. Abercrombie & Fitch's quick ratio has also improved significantly in 2024 compared to the previous year, reflecting a stronger ability to meet short-term obligations without relying on selling inventory.

The cash ratio, the most conservative liquidity metric, assesses the company's ability to cover current liabilities with cash and cash equivalents alone. Abercrombie & Fitch's cash ratio has increased in 2024, indicating that the company holds more cash relative to its current liabilities compared to the previous year.

Overall, the improving trend in Abercrombie & Fitch's liquidity ratios suggests a strengthening liquidity position, with the company being better equipped to meet its short-term financial commitments. However, it is essential to monitor these ratios over time to ensure consistent liquidity management and financial health.

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Additional liquidity measure

The cash conversion cycle of Abercrombie & Fitch Company has fluctuated over the past five years. In the latest period ending on February 3, 2024, the company's cash conversion cycle was 46.35 days, indicating that it took approximately 46 days for the company to convert its investments in inventory and other resources into cash from sales. This represents an improvement from the previous year when the cash conversion cycle was 66.84 days, suggesting a more efficient management of working capital.

Comparing to two years ago, the cash conversion cycle was 46.15 days, showing a slight increase in the latest period. However, it still remained at a relatively stable level. In the year ending January 30, 2021, the cash conversion cycle was 43.70 days, demonstrating a shorter cycle period compared to the most recent year.

In contrast, two years ago, on February 1, 2020, the company's cash conversion cycle was 61.24 days, indicating a longer period for the company to convert its investments into cash. Overall, the recent fluctuations in the cash conversion cycle of Abercrombie & Fitch Company suggest varying efficiencies in managing its working capital and operations over the past five years.