Core & Main Inc (CNM)

Core & Main Inc's liquidity ratios have exhibited some fluctuations over the past few quarters.

The current ratio, which measures the company's ability to cover short-term liabilities with its current assets, has shown a decreasing trend from 3.05 in January 2023 to 2.03 in October 2022, before slightly recovering to 2.36 in October 2023. However, the current ratio decreased again to 2.29 in January 2024. While the ratio remains above 1, indicating that Core & Main Inc has more than enough current assets to cover its short-term obligations, the downward trend may suggest that the company's liquidity position has weakened slightly.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also fluctuated over the quarters. The ratio decreased from 1.56 in January 2023 to 1.05 in May 2022 before increasing to 1.43 in October 2023. However, the quick ratio dropped to 1.26 in January 2024. This indicates that while Core & Main Inc may have a solid ability to meet its short-term obligations without relying on selling inventory, there have been some fluctuations in this capacity.

The cash ratio, which shows the proportion of current liabilities that could be covered by cash on hand, has been inconsistent. The company had a significant increase in the cash ratio from 0.24 in January 2023 to 0.09 in May 2022, indicating an improvement in the company's ability to meet current liabilities with cash. However, the cash ratio dropped to 0.00 in several quarters, including January 2024, which may raise concerns about the company's immediate cash availability to meet obligations.

Overall, while Core & Main Inc generally maintains healthy liquidity levels, the fluctuations in the current ratio, quick ratio, and cash ratio imply a need for closer monitoring of the company's liquidity position moving forward.

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Additional liquidity measure

The cash conversion cycle of Core & Main Inc has shown some fluctuations over the past few quarters. Starting from May 1, 2022, the cash conversion cycle stood at 89.10 days, indicating the number of days it takes for the company to convert its resources into cash. Subsequently, the cycle decreased to 88.22 days on January 29, 2023, before experiencing an increase to 89.13 days on April 30, 2023.

The trend continued with a further rise to 86.95 days on July 30, 2023, and a peak of 78.67 days on October 29, 2023. However, the cycle decreased to 69.68 days on January 28, 2024, showing an improvement in the efficiency of Core & Main Inc in converting its assets into cash during that period.

Overall, the cash conversion cycle analysis indicates that there have been fluctuations in the efficiency of Core & Main Inc in managing its working capital over the quarters, with some periods showing improvements while others showing increases in the number of days required to convert resources into cash. It is important for the company to continue monitoring and managing its cash conversion cycle to ensure optimal working capital performance.