Acuity Brands Inc (AYI)

The liquidity ratios of Acuity Brands, Inc. indicate the company's ability to meet its short-term obligations.

The current ratio, which measures the company's ability to pay its short-term liabilities with its short-term assets, has generally shown a positive trend over the past five years, increasing from 2.42 in 2019 to 2.34 in 2023. This suggests an improvement in the company's short-term solvency.

The quick ratio, which provides a more conservative measure of liquidity by excluding inventories from current assets, has also displayed a similar trend of improvement, albeit with fluctuations. The ratio has increased from 1.85 in 2019 to 1.72 in 2023, indicating a positive ability to cover short-term obligations.

The cash ratio, which indicates the firm's capacity to cover short-term liabilities with its cash and cash equivalents, has fluctuated over the years but has generally demonstrated a reasonably healthy position. It increased from 0.91 in 2019 to 0.79 in 2023, showing a positive trend in the company's cash liquidity.

Overall, the liquidity ratios for Acuity Brands, Inc. show a generally positive trend, indicating the company's ability to cover its short-term obligations using its current assets, quick assets, and cash.

---

Additional liquidity measure

The cash conversion cycle of Acuity Brands, Inc. has shown some fluctuations over the past five years. The cycle measures how long it takes for the company to convert its investments in inventory and other resources into cash flows from sales. The trend indicates that the company took longer to convert its investments into cash in FY 2022 compared to FY 2021. However, in FY 2023, the cycle decreased to 64.78 days from 74.42 in the previous year, suggesting an improvement in the efficiency of the company's cash management. This indicates that the company may have been able to manage its inventory and accounts receivable more effectively in the most recent fiscal year, which ultimately led to a shorter cash conversion cycle. This improvement could potentially signify better liquidity and working capital management for the company.