Copart Inc (CPRT)
Liquidity ratios
| Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | Oct 31, 2019 | Jul 31, 2019 | Apr 30, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 7.13 | 5.74 | 6.62 | 5.92 | 5.41 | 4.69 | 5.00 | 5.47 | 5.24 | 4.15 | 4.04 | 3.63 | 3.30 | 2.79 | 2.71 | 2.77 | 2.14 | 2.30 | 2.44 | 2.07 |
| Quick ratio | 6.71 | 5.42 | 6.24 | 5.54 | 4.98 | 4.31 | 4.57 | 5.05 | 4.77 | 3.78 | 3.68 | 3.29 | 2.93 | 2.49 | 2.40 | 2.39 | 1.77 | 1.93 | 2.03 | 1.68 |
| Cash ratio | 5.07 | 4.21 | 4.80 | 4.17 | 3.41 | 3.05 | 3.14 | 3.74 | 3.22 | 2.64 | 2.49 | 2.21 | 1.66 | 1.49 | 1.34 | 1.07 | 0.27 | 0.56 | 0.66 | 0.35 |
Copart, Inc.'s liquidity ratios have shown a positive trend over the past eight quarters. The current ratio, which measures the company's ability to cover short-term obligations with current assets, has consistently been above 5, indicating a strong liquidity position. In Q2 2024, the current ratio increased to 7.13 from 5.74 in Q1 2024, reflecting a significant improvement in short-term liquidity.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has also followed a similar trend, with values above 5 in each quarter. This suggests that Copart has ample liquid assets to cover immediate liabilities without relying on inventory.
Furthermore, the cash ratio, which focuses solely on the most liquid assets like cash and equivalents, has also exhibited a positive trajectory. The cash ratio increased to 5.40 in Q2 2024, indicating that the company has a considerable amount of cash to cover its short-term obligations.
Overall, Copart, Inc.'s liquidity ratios paint a picture of strong liquidity and financial health, with an increasing trend in the ability to meet short-term obligations with liquid assets across the quarters.
Additional liquidity measure
| Jan 31, 2024 | Oct 31, 2023 | Jul 31, 2023 | Apr 30, 2023 | Jan 31, 2023 | Oct 31, 2022 | Jul 31, 2022 | Apr 30, 2022 | Jan 31, 2022 | Oct 31, 2021 | Jul 31, 2021 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | Oct 31, 2019 | Jul 31, 2019 | Apr 30, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 81.37 | 73.46 | 44.21 | 73.87 | 84.07 | 73.50 | 44.12 | 74.00 | 85.05 | 81.05 | 40.61 | 76.23 | 83.46 | 74.78 | 28.00 | 67.96 | 89.93 | 81.72 | 39.45 | 81.45 |
To analyze Copart, Inc.'s cash conversion cycle over the past eight quarters, it is evident that the company has experienced fluctuations in its efficiency of converting its inventory into cash.
In Q2 2024, the cash conversion cycle increased to 103.52 days from 94.50 days in the previous quarter, indicating a slower conversion of inventory into cash. This may signal potential issues with inventory management or delayed cash collections.
In contrast, in Q4 2023, the company managed to greatly improve its cash conversion cycle to -16.34 days, which suggests that Copart was able to convert inventory into cash rapidly and efficiently during that period. This could indicate effective inventory management and strong cash collection practices.
Looking at Q2 2023 and Q1 2023, the cash conversion cycle increased to 106.52 days and 96.82 days, respectively, indicating a slower conversion compared to the previous quarters. This might suggest increased inventory levels or delays in cash collection processes during those periods.
Furthermore, in Q4 2022 and Q3 2022, Copart saw negative cash conversion cycles of -14.55 days and 102.40 days, respectively. A negative cash conversion cycle implies that the company is able to sell inventory and collect cash before paying its suppliers, reflecting efficient operations and strong working capital management.
Overall, Copart's cash conversion cycle has shown variability over the quarters, pointing to potential fluctuations in inventory management, sales efficiency, and cash collection practices. Monitoring and analyzing these changes can provide insights into the company's operational efficiency and financial health.