Caleres Inc (CAL)

Based on the provided data for Caleres Inc, let's analyze the liquidity ratios over multiple periods:

1. Current Ratio:
- The current ratio measures the company's ability to cover its short-term liabilities with its current assets.
- In January 2023 and January 2024, the current ratio was 0.91, indicating that the company had less than $1 in current assets for every $1 in current liabilities.
- However, the current ratio improved to 1.06 by February 2024 and further increased to 1.10 by January 2025. This suggests that Caleres Inc has enhanced its ability to meet short-term obligations.

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.
- The quick ratio was very low in January 2023 and 2024, at 0.20 and 0.03 respectively, indicating a potential difficulty for the company to meet immediate obligations without relying on inventory.
- However, there was a significant improvement in the quick ratio to 0.24 by February 2024, but it dropped back to 0.04 by January 2025, showing some volatility in Caleres Inc's quick liquidity position.

3. Cash Ratio:
- The cash ratio focuses solely on the company's ability to cover short-term liabilities with its cash and cash equivalents.
- Caleres Inc maintained a consistent cash ratio of 0.04 from January 2023 to January 2025, indicating the company's ability to cover 4% of its short-term liabilities with cash.
- While the cash ratio remained steady, it is relatively low compared to ideal levels, suggesting that the company may need to rely on other liquid assets to meet its obligations.

In summary, Caleres Inc has shown an improvement in its current ratio over the periods analyzed, indicating a stronger ability to cover short-term liabilities with current assets. However, the quick ratio and cash ratio present some challenges, with fluctuations and relatively low values, suggesting potential liquidity risks that the company may need to address to enhance its short-term financial stability.

---

Additional liquidity measure

The cash conversion cycle of Caleres Inc has shown variability over the years. As of January 28, 2023, the company's cash conversion cycle stood at 64.69 days, indicating a relatively efficient cash conversion process. However, this metric increased significantly to 125.81 days by January 31, 2023, suggesting a longer time taken to convert investments in inventory and other resources into cash receipts.

Subsequently, the cash conversion cycle continued to rise to 126.96 days by January 31, 2024, signaling potential challenges in managing working capital effectively. The company's efficiency improved significantly by February 3, 2024, with the cash conversion cycle reducing to 60.03 days, reflecting a more streamlined process of converting investments into cash.

However, by January 31, 2025, the cash conversion cycle surged to 137.48 days, indicating a prolonged period to convert resources into cash flow. Overall, the fluctuation in Caleres Inc's cash conversion cycle highlights the importance of closely monitoring working capital management to optimize cash flows and operational efficiency.