Acuity Brands Inc (AYI)
Liquidity ratios
| Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | May 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 2.59 | 2.45 | 2.34 | 2.26 | 2.34 | 2.09 | 2.00 | 1.86 | 2.25 | 2.30 | 2.23 | 2.29 | 2.33 | 2.31 | 2.33 | 2.40 | 2.29 | 2.11 | 2.42 | 2.19 |
| Quick ratio | 1.80 | 1.72 | 1.60 | 1.45 | 1.45 | 1.24 | 1.21 | 1.06 | 1.37 | 1.49 | 1.54 | 1.64 | 1.64 | 1.63 | 1.72 | 1.69 | 1.55 | 1.35 | 1.71 | 1.46 |
| Cash ratio | 0.97 | 0.85 | 0.67 | 0.58 | 0.57 | 0.41 | 0.30 | 0.37 | 0.64 | 0.72 | 0.71 | 0.88 | 0.87 | 0.87 | 0.91 | 0.90 | 0.67 | 0.47 | 0.77 | 0.53 |
Acuity Brands Inc's liquidity ratios have displayed a generally positive trend over the provided periods. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has consistently been above 2x, indicating a strong liquidity position. It peaked at 2.59 on Feb 29, 2024, and remained above 2x in most periods, except for a few minor fluctuations.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also shown a favorable trend, although slightly lower than the current ratio. It peaked at 1.80 on Feb 29, 2024, suggesting that the company has a solid ability to meet its short-term obligations without relying on inventory liquidation.
The cash ratio, the most conservative measure of liquidity that looks at the company's ability to cover its current liabilities with its cash and cash equivalents, has generally improved over time. Acuity Brands Inc's cash ratio reached its highest level of 0.97 on Feb 29, 2024, indicating a stronger ability to settle immediate debt obligations with cash on hand.
Overall, the liquidity ratios of Acuity Brands Inc demonstrate a stable and robust financial position, with ample liquidity to meet its short-term commitments and financial obligations. This suggests the company is well-positioned to weather potential financial challenges and pursue strategic opportunities.
Additional liquidity measure
| Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | Nov 30, 2019 | Aug 31, 2019 | May 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 53.09 | 54.68 | 60.33 | 55.17 | 57.94 | 59.90 | 70.15 | 74.32 | 64.01 | 58.56 | 61.49 | 53.98 | 50.44 | 49.29 | 54.12 | 51.63 | 53.87 | 55.38 | 55.98 | 58.17 |
The cash conversion cycle of Acuity Brands Inc fluctuated over the recent periods, ranging from a low of 49.29 days to a high of 74.32 days. The cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales. A shorter cycle indicates more efficient use of resources and quicker cash generation.
In the most recent period, as of February 29, 2024, the cash conversion cycle stood at 53.09 days, showing a slight improvement compared to the previous period. This indicates that the company is managing its inventory, receivables, and payables more effectively, resulting in a faster conversion of investments into cash.
Acuity Brands Inc should continue to monitor its cash conversion cycle to ensure it remains optimized, allowing the company to operate efficiently and maintain healthy cash flows. Additionally, the company may consider implementing strategies to further shorten the cycle, such as improving inventory management, accelerating receivables collection, and extending payables payment terms.