Coty Inc (COTY)

Liquidity ratios

Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019
Current ratio 0.75 0.80 0.85 0.79 0.75 0.69 0.65 0.70 0.66 0.69 0.75 0.67 0.74 0.71 0.74 1.90 1.81 1.19 0.86 0.97
Quick ratio 0.29 0.30 0.33 0.29 0.23 0.23 0.25 0.27 0.27 0.36 0.35 0.29 0.85 0.77 0.36 0.29 0.22 0.69 0.40 0.43
Cash ratio 0.12 0.11 0.16 0.10 0.09 0.09 0.10 0.08 0.09 0.21 0.18 0.12 0.63 0.62 0.18 0.15 0.09 0.41 0.08 0.11

Coty Inc's liquidity ratios, including the current ratio, quick ratio, and cash ratio, have fluctuated 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 declining trend, decreasing from 0.97 in September 2019 to 0.75 in June 2024. This indicates a potential weakening in Coty's short-term liquidity position.

Similarly, the quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also demonstrates a downward trend over the same period. The quick ratio declined from 0.69 in September 2019 to 0.29 in June 2024, reflecting a decreasing ability to meet short-term liabilities without relying on inventory.

The cash ratio, which provides insight into the company's ability to cover short-term liabilities with its cash and cash equivalents, has been quite volatile but generally shows a downward trend from 0.63 in September 2021 to 0.12 in June 2024. This suggests a decreasing reliance on cash holdings to meet immediate obligations.

Overall, Coty Inc's liquidity ratios indicate a potential liquidity challenge, as the company's ability to meet short-term obligations with its current assets, excluding inventory (quick ratio), and especially with its cash holdings (cash ratio), has been diminishing over the past few quarters. This trend warrants further investigation into the company's cash management and working capital practices to ensure sound liquidity management.

Additional liquidity measure

Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019
Cash conversion cycle days -15.33 -3.48 -15.69 -2.56 -17.99 -17.49 -28.14 -8.12 -13.08 -13.37 -24.66 -4.00 1.83 -5.77 3.13 13.68 -0.54 23.93 30.46 32.94

The cash conversion cycle of Coty Inc has shown fluctuating trends over the past several quarters, ranging from negative values to positive values. Negative values indicate that the company is efficient in managing its working capital and converting its resources into cash quickly.

In the most recent quarter, ending June 30, 2024, the cash conversion cycle was -15.33 days, implying that Coty Inc was able to convert its investments in inventory into cash within roughly two weeks, showcasing efficient inventory management and collection of receivables.

However, it is important to note that the cash conversion cycle has been volatile, with periods of both positive and negative cycles. This suggests fluctuations in inventory turnover, accounts receivable collection, and accounts payable management.

Overall, while the recent negative values are positive indicators of the company's ability to efficiently manage its working capital, it will be crucial for Coty Inc to maintain consistency in its cash conversion cycle to ensure stable cash flows and sustainable operations.