Cavco Industries Inc (CVCO)

Cavco Industries Inc's current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has been fluctuating over the past five years. It stood at 2.75 in March 2021, decreased to 2.53 in March 2022, but then improved to 2.74 in March 2023 before significantly rising to 3.12 in March 2024. There is no data available for March 2025. Generally, a current ratio above 1 indicates the company has more current assets than current liabilities, and a higher ratio suggests a stronger liquidity position.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has followed a similar trend over the same period. Starting at 1.88 in March 2021, it declined to 1.41 in March 2022 before slightly increasing to 1.49 in March 2023, and further rose to 1.87 in March 2024. Again, there is no data for March 2025. A quick ratio above 1 indicates that the company can meet its short-term obligations without relying on selling inventory.

The cash ratio, which is the most conservative measure of liquidity only considering cash and cash equivalents, has also shown variability for Cavco Industries Inc. It was at 1.44 in March 2021, decreased to 0.90 in March 2022, and then improved to 0.98 in March 2023, and further increased to 1.36 in March 2024. Like the other ratios, there is no data available for March 2025. A higher cash ratio is preferable as it signifies the company has enough cash to cover its short-term liabilities without relying on other current assets.

Overall, based on the current ratio, quick ratio, and cash ratio, Cavco Industries Inc has demonstrated fairly consistent liquidity over the past few years, with improvements seen in the most recent data available. It is important for investors and stakeholders to continue monitoring these ratios to ensure the company maintains a healthy liquidity position for future growth and stability.

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Additional liquidity measure

The cash conversion cycle of Cavco Industries Inc has shown fluctuations over the past five years.

Starting at 75.99 days on March 31, 2021, the cash conversion cycle increased to 93.68 days by March 31, 2022. This significant increase indicates a potential delay in converting inventory into cash, or a longer period to collect receivables.

However, the company managed to decrease the cycle to 79.05 days by March 31, 2023, showing an improvement in converting sales back to cash. Subsequently, the cycle increased slightly to 84.16 days by March 31, 2024, before decreasing again to 78.68 days by March 31, 2025.

Overall, Cavco Industries Inc has experienced some variability in its cash conversion cycle, which could be attributed to changes in inventory management, sales collection efficiency, or payment practices. It is essential for the company to monitor and manage its cash conversion cycle effectively to ensure optimal liquidity and operational efficiency.