Buckle Inc (BKE)

The liquidity ratios of Buckle Inc, as reflected in the data provided, indicate a positive trend over the years.

1. Current Ratio: The current ratio, which measures the company's ability to cover short-term obligations with its current assets, has shown a consistent increase from 1.87 in both January 28, 2023 and January 31, 2023 to 2.05 in January 31, 2025. This suggests that Buckle Inc has improved its liquidity position and is better equipped to meet its current liabilities.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Buckle Inc's quick ratio has also demonstrated a positive trend, rising from 1.21 in January 31, 2023 to 1.36 in January 31, 2025. This indicates that the company has a strong ability to meet its short-term obligations without relying on inventory liquidation.

3. Cash Ratio: The cash ratio, which focuses solely on the most liquid assets like cash and cash equivalents to cover current liabilities, has been relatively stable and strong for Buckle Inc, ranging from 1.21 to 1.36 over the years. This implies that the company has a significant amount of cash on hand to meet its immediate financial obligations.

Overall, the liquidity ratios of Buckle Inc demonstrate a sound financial position with improving liquidity levels, indicating the company's ability to effectively manage its short-term obligations and maintain financial stability.

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Additional liquidity measure

The cash conversion cycle of Buckle Inc has shown fluctuations over the past few years.

On January 28, 2023, the company had a relatively low cash conversion cycle of 32.25 days, indicating that it was efficient in converting its investments in inventory and accounts receivable into cash.

However, by January 31, 2023, the cash conversion cycle increased significantly to 68.25 days, suggesting a delay in converting its resources into cash. This could be due to various factors such as slower sales, extended payment terms with suppliers, or inefficiencies in inventory management.

The trend continued into January 31, 2024, with a further increase in the cash conversion cycle to 71.80 days. This prolonged cycle may put pressure on the company's working capital and cash flow management.

Interestingly, by February 3, 2024, there was a notable improvement as the cash conversion cycle decreased to 32.13 days, indicating a more efficient conversion of resources into cash.

However, the cycle increased again by January 31, 2025, reaching 70.55 days. This fluctuation may indicate ongoing challenges in managing inventory, receivables, and payables effectively.

Overall, Buckle Inc needs to focus on enhancing its working capital management practices to optimize its cash conversion cycle and improve its overall liquidity position.