Burlington Stores Inc (BURL)

Based on the data provided, the liquidity ratios of Burlington Stores Inc have shown a decreasing trend over the years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has decreased from 1.49 in January 2021 to 1.16 in February 2025. Similarly, the quick ratio, which excludes inventory from current assets in its calculation, has declined from 0.86 in January 2021 to 0.48 in February 2025. This suggests a potential decrease in the company's ability to meet its short-term obligations without relying on selling its inventory.

Furthermore, the cash ratio, which provides a more stringent measure of liquidity by considering only cash and cash equivalents, has also decreased from 0.82 in January 2021 to 0.44 in February 2025. This indicates a decline in the company's ability to cover its current liabilities with its most liquid assets.

Overall, the decreasing trend in all three liquidity ratios may indicate potential liquidity challenges for Burlington Stores Inc, as its ability to meet short-term obligations using current assets, excluding inventory, and cash equivalents has weakened over the years. Further analysis of the company's cash management and working capital practices may be necessary to address these liquidity concerns.

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Additional liquidity measure

Burlington Stores Inc's cash conversion cycle, a metric that reflects the time it takes for a company to convert its investment in inventory and other inputs into cash flows, has shown varying trends over the past few years.

In January 30, 2021, the company had a negative cash conversion cycle of -8.53 days, indicating that Burlington Stores Inc was efficient in managing its inventory and collecting receivables, resulting in a quicker conversion of investments into cash.

However, by January 29, 2022, the cash conversion cycle improved further to -0.51 days, suggesting even better efficiency in managing working capital.

In January 28, 2023, there was a notable change as the cash conversion cycle turned positive at 13.21 days, indicating a slowdown in inventory turnover or collection of receivables.

By February 3, 2024, the cash conversion cycle decreased to 8.19 days, which may signal an improvement in managing working capital efficiency compared to the previous period.

In February 1, 2025, the cash conversion cycle increased to 11.12 days, reflecting a longer time required to convert investments into cash flows.

Overall, Burlington Stores Inc's cash conversion cycle has shown fluctuations in recent years, with periods of exceptional efficiency followed by moments of increased working capital requirements and slower cash conversion. Tracking these changes is essential for understanding the company's liquidity management and operational efficiency.