Bloomin Brands Inc (BLMN)

Bloomin Brands Inc's liquidity ratios have fluctuated over the years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has shown a varied trend from lows of 0.19 in September 2020 to highs of 0.40 in June 2020. As of December 31, 2024, the current ratio stood at 0.34, indicating potential challenges in meeting short-term commitments.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also showcases fluctuations in Bloomin Brands Inc's ability to meet its immediate obligations. The quick ratio decreased from 0.48 in March 2020 to a low of 0.07 in December 2024 before rebounding to 0.40 in March 2024. This suggests a potential liquidity concern, especially towards the end of the period.

The cash ratio, which is the most conservative liquidity ratio focusing solely on cash and cash equivalents compared to current liabilities, shows a similar trend to the quick ratio. Bloomin Brands Inc's cash ratio ranged from 0.48 in March 2020 to 0.07 in December 2024. This implies a fluctuating level of liquidity that may warrant closer monitoring and management of cash resources.

In conclusion, the liquidity ratios of Bloomin Brands Inc indicate a level of variability and potential liquidity challenges, particularly as reflected in the declining quick ratio and cash ratio towards the end of the period under review. Management should keep a close eye on the company's liquidity position to ensure it can meet its short-term obligations effectively.

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Additional liquidity measure

The cash conversion cycle of Bloomin Brands Inc, a measure of the company's efficiency in managing its cash flow, has shown some fluctuations over the reported periods.

From March 31, 2020, to December 31, 2024, the cash conversion cycle ranged from a low of 6.04 days to a high of 8.52 days. The average cash conversion cycle during this period was approximately 7.28 days.

The company's cash conversion cycle decreased slightly in the most recent periods, with the cycle standing at 6.87 days as of June 30, 2024, compared to 7.14 days as of March 31, 2021.

A lower cash conversion cycle indicates that Bloomin Brands Inc is able to convert its investments in inventory and accounts receivable into cash more efficiently, potentially indicating effective working capital management.

However, it is important for the company to monitor and manage its cash conversion cycle effectively to ensure optimal cash flow and liquidity. Fluctuations in the cycle can be influenced by various factors such as changes in inventory turnover, accounts receivable collection period, and accounts payable payment period. Regular monitoring and analysis of the cash conversion cycle can help Bloomin Brands Inc make informed decisions to improve its cash flow management.