Academy Sports Outdoors Inc (ASO)
Liquidity ratios
| Feb 3, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.87 | 1.62 | 1.68 | 1.65 | 1.62 | 1.57 | 1.58 | 1.56 | 1.52 | 1.36 | 1.46 | 1.39 | 1.21 | 1.61 |
| Quick ratio | 0.42 | 0.25 | 0.32 | 0.29 | 0.34 | 0.28 | 0.37 | 0.41 | 0.45 | 0.31 | 0.48 | 0.49 | 0.34 | 0.71 |
| Cash ratio | 0.40 | 0.23 | 0.31 | 0.28 | 0.32 | 0.27 | 0.36 | 0.40 | 0.43 | 0.31 | 0.47 | 0.48 | 0.32 | 0.70 |
Academy Sports Outdoors Inc's liquidity ratios reveal its ability to meet short-term obligations and manage cash effectively. The current ratio, which measures current assets against current liabilities, shows an improving trend from January 2021 to February 2024, indicating the company's strengthening short-term financial position. However, the current ratio dipped from 1.68 in July 2023 to 1.36 in October 2021, potentially signaling a temporary strain on liquidity.
The quick ratio, a more stringent measure of liquidity excluding inventory, also displays fluctuations but generally remains low, indicating a reliance on inventory to meet immediate obligations. The quick ratio ranged from 0.25 in October 2023 to 0.71 in July 2021, with lower values suggesting potential difficulty in meeting short-term liabilities without selling inventory.
The cash ratio, which assesses the company's ability to cover current liabilities with its cash and cash equivalents, demonstrates a fluctuating yet generally stable trend. While the cash ratio improved from 0.23 in October 2023 to 0.40 in February 2024, it decreased from 0.47 in October 2021 to 0.32 in January 2022. This indicates variations in the company's cash position over time, possibly influenced by changes in cash flow management or investment strategies.
Overall, Academy Sports Outdoors Inc's liquidity ratios suggest a satisfactory ability to meet short-term obligations, with improvements in the current and cash ratios over the analyzed period. However, the company should continue monitoring its liquidity metrics and consider strategies to enhance cash reserves and reduce reliance on inventory for liquidity management.
Additional liquidity measure
| Feb 3, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 44.58 | 46.16 | 43.35 | 44.93 | 40.18 | 43.46 | 34.65 | 32.14 | 28.07 | 26.69 | 20.08 |
The cash conversion cycle of Academy Sports Outdoors Inc has shown fluctuating trends over the past 11 reported periods. The cycle represents the time it takes for the company to convert its investment in inventory into cash inflows from sales, considering both accounts receivable and accounts payable.
The company's cash conversion cycle ranged from a low of 20.08 days to a high of 46.16 days over the period analyzed. A lower cash conversion cycle indicates efficiency in managing inventory, collecting receivables, and paying suppliers, which is favorable as it allows the company to generate cash more quickly.
In the latest reported period, the cash conversion cycle was 44.58 days, suggesting a slightly longer cycle compared to the previous period. This may indicate a potential slowdown in the conversion of inventory into cash, which could have implications for the company's working capital management.
It is important for Academy Sports Outdoors Inc to closely monitor and manage its cash conversion cycle to ensure optimal working capital utilization and liquidity. Analyzing the components of the cycle, such as inventory turnover, accounts receivable collection period, and accounts payable turnover, can provide insights into areas that may require improvement to enhance overall financial performance.