Abercrombie & Fitch Company (ANF)

Based on the provided data, let's analyze Abercrombie & Fitch Company's liquidity ratios:

1. Current Ratio: The current ratio measures the company's ability to cover its short-term obligations with its current assets. Abercrombie & Fitch Company's current ratio has been relatively stable over the years, ranging from 1.36 to 1.59. This suggests that the company has enough current assets to cover its current liabilities.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, is a more stringent measure of liquidity as it excludes inventory from current assets. Abercrombie & Fitch Company's quick ratio has varied between 0.57 and 1.01. A ratio of less than 1 may indicate that the company may have difficulty meeting its short-term obligations without relying on inventory.

3. Cash Ratio: The cash ratio is the most conservative liquidity ratio, focusing only on the company's ability to cover its current liabilities with cash and cash equivalents. Abercrombie & Fitch Company's cash ratio has ranged from 0.57 to 0.93. A higher cash ratio indicates a stronger ability to cover current liabilities with cash on hand.

Overall, Abercrombie & Fitch Company demonstrates a reasonable level of liquidity based on the current ratio, albeit with some fluctuations in the quick and cash ratios. Investors and creditors typically look for consistent or improving liquidity ratios to ensure the company can meet its short-term financial obligations efficiently.

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Additional liquidity measure

The cash conversion cycle of Abercrombie & Fitch Company has shown fluctuations over the years according to the provided data. In January 2023, the company's cash conversion cycle was 66.84 days, indicating that it took Abercrombie & Fitch approximately 66.84 days to convert its investments in inventory and other resources into cash receipts from sales.

By January 2024, the cash conversion cycle increased to 107.96 days, suggesting that the company took longer to convert its resources into cash during that period. However, this trend reversed by February 3, 2024, when the cash conversion cycle decreased significantly to 46.35 days, indicating an improvement in the company's efficiency in converting its investments into cash.

As of January 31, 2025, the cash conversion cycle increased again to 118.31 days, possibly indicating potential challenges in managing inventory and collecting cash from sales. Overall, fluctuations in the cash conversion cycle provide insights into Abercrombie & Fitch's operational efficiency and effectiveness in managing working capital.