Carter’s Inc (CRI)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 2.25 | 2.15 | 2.25 | 2.65 | 2.46 |
| Quick ratio | 1.19 | 1.05 | 0.78 | 1.69 | 1.63 |
| Cash ratio | 0.81 | 0.69 | 0.40 | 1.37 | 1.39 |
Carter’s Inc has shown consistent strength in its liquidity ratios over the years. The current ratio, which indicates the company's ability to cover its current liabilities with its current assets, has gradually increased from 2.46 in December 2020 to 2.25 in December 2022, before slightly declining to 2.15 in December 2023 and rebounding to 2.25 in December 2024. This indicates that the company has a solid ability to meet its short-term obligations.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has seen some fluctuations. The ratio improved from 1.63 in December 2020 to 1.69 in December 2021 but then dropped significantly to 0.78 in December 2022. However, it has since recovered, reaching 1.05 in December 2023 and further improving to 1.19 in December 2024. This indicates that the company has a healthy ability to meet its short-term liabilities without relying on inventory.
The cash ratio, which is the most conservative liquidity ratio that only considers cash and cash equivalents, also witnessed fluctuations. The ratio declined from 1.39 in December 2020 to 0.40 in December 2022, indicating some liquidity pressure. However, it improved to 0.69 in December 2023 and further to 0.81 in December 2024, showing a strengthening cash position for the company.
Overall, Carter’s Inc demonstrates a solid liquidity position, as indicated by the steady current ratio, recovering quick ratio, and improving cash ratio over the years. This suggests that the company is well-equipped to meet its short-term financial obligations effectively.
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 103.20 | 117.16 | 170.39 | 93.26 | 59.77 |
The cash conversion cycle for Carter’s Inc has shown variability over the years, starting at 59.77 days as of December 31, 2020, and reaching 170.39 days by December 31, 2022. This indicates that the company took longer to convert its investments in inventory and accounts receivables into cash during that period. However, there was a notable improvement in the cash conversion cycle by December 31, 2024, where it decreased to 103.20 days compared to the peak in 2022. Overall, the trend suggests fluctuations in the efficiency of Carter’s Inc in managing its working capital and converting it into cash during the specified periods.