BJs Restaurants Inc (BJRI)

Based on the provided data, BJs Restaurants Inc's liquidity ratios demonstrate a concerning trend over the years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has been consistently decreasing from 0.54 in 2020 to 0.41 in 2024. This indicates that the company may be facing challenges in meeting its short-term obligations.

Furthermore, the quick ratio, also known as the acid-test ratio, gives a more stringent assessment of liquidity by excluding inventory from current assets. BJs Restaurants Inc's quick ratio has also shown a declining trend, falling from 0.30 in 2020 to 0.13 in 2024. This suggests that the company may struggle to meet its immediate liabilities without relying on the sale of inventory.

Lastly, the cash ratio, which specifically measures the company's ability to cover its current liabilities with cash and cash equivalents, has remained consistently low at 0.13 from 2022 to 2024. This implies that BJs Restaurants Inc may have limited cash resources available to meet its short-term obligations.

In conclusion, based on the liquidity ratios analysis, it is evident that BJs Restaurants Inc's liquidity position has weakened over time, indicating potential cash flow challenges and a need for closer monitoring of the company's ability to meet its short-term financial obligations.

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Additional liquidity measure

The cash conversion cycle of BJs Restaurants Inc has shown fluctuations over the years based on the provided data.

As of December 31, 2020, the cash conversion cycle was 5.39 days, indicating that on average, it took the company about 5.39 days to convert its investments in inventory and other resources into cash flows from sales.

By December 31, 2021, the cash conversion cycle decreased to 4.41 days, suggesting an improvement in BJs Restaurants' efficiency in managing its working capital and converting it into cash.

The trend continued positively as of December 31, 2022, with the cash conversion cycle further decreasing to 3.81 days, reflecting the company's ability to efficiently manage its operations and collect cash from customers more quickly.

However, on December 31, 2023, there was a slight uptick in the cash conversion cycle to 4.18 days, indicating a temporary slowdown in BJs Restaurants' cash conversion efficiency, possibly due to changes in inventory management or collection practices.

The most significant change occurred by December 31, 2024, where the cash conversion cycle significantly increased to 13.29 days. This sharp increase may imply challenges in managing working capital effectively, such as slower inventory turnover or delayed collection of receivables.

In conclusion, BJs Restaurants Inc experienced fluctuations in its cash conversion cycle in the analyzed period, with improvements in some years and challenges in others, highlighting the importance of continuously monitoring and optimizing working capital management practices.