Burlington Stores Inc (BURL)

Burlington Stores Inc's liquidity ratios indicate the company's ability to meet its short-term financial obligations. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has declined over the past five years from 1.49 in January 2021 to 1.15 in February 2024. This trend suggests a potential weakening in Burlington's liquidity position.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Burlington's quick ratio has also decreased over the same period, indicating a decreasing ability to cover its short-term liabilities without relying on selling inventory. The quick ratio fell from 0.86 in January 2021 to 0.49 in February 2024.

The cash ratio, which represents the company's ability to meet its short-term liabilities using only its cash and cash equivalents, has shown a similar declining trend. Burlington's cash ratio decreased from 0.82 in January 2021 to 0.46 in February 2024. This suggests that the company may have less liquid assets available to cover its immediate obligations.

Overall, the downward trend in Burlington Stores Inc's liquidity ratios over the past five years raises concerns about the company's ability to meet its short-term financial obligations. It may indicate a need for Burlington to improve its cash management practices or seek additional sources of liquidity to strengthen its financial position.

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Additional liquidity measure

The cash conversion cycle for Burlington Stores Inc has fluctuated over the past five years. In FY2024, the company's cash conversion cycle improved to 8.19 days from 13.21 days in FY2023. This indicates that Burlington Stores Inc was able to convert its invested cash back into cash received from sales more efficiently in FY2024.

In FY2022, the cash conversion cycle was negative at -0.51 days, suggesting that the company was able to generate more cash from its sales cycle than the time it took to pay off its suppliers. This may be an indication of effective working capital management.

However, in FY2021, the cash conversion cycle increased to -8.53 days from the positive cycle in FY2020 of 6.14 days. This suggests potential challenges in managing working capital efficiently, leading to a longer cash conversion cycle.

Overall, fluctuations in the cash conversion cycle indicate changes in Burlington Stores Inc's ability to manage its cash flows, inventory, and payment cycles. It is important for the company to continue monitoring and optimizing its cash conversion cycle to ensure efficient operations and healthy liquidity levels.