Designer Brands Inc (DBI)
Liquidity ratios
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 1.25 | 1.24 | 1.20 | 1.04 | 1.32 |
| Quick ratio | 0.21 | 0.21 | 0.36 | 0.34 | 0.30 |
| Cash ratio | 0.08 | 0.09 | 0.10 | 0.08 | 0.16 |
Designer Brands Inc's liquidity ratios for the past five years indicate mixed results. The current ratio has generally been above 1, reflecting the company's ability to cover its short-term obligations with current assets. However, there has been some fluctuation over the years, with a peak of 1.32 in 2020 and a low of 1.04 in 2021.
The quick ratio, which excludes inventory from current assets, has remained relatively low, indicating that the company may have difficulty meeting its short-term obligations without relying on inventory. The cash ratio, which measures the company's ability to cover current liabilities with cash and cash equivalents, has also shown variability, with a range of 0.08 to 0.16.
Overall, Designer Brands Inc's liquidity position appears to be somewhat strained, as evidenced by the low quick and cash ratios. The company may need to carefully manage its working capital and possibly reassess its current asset composition to improve its liquidity position in the future.
Additional liquidity measure
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 58.93 | 65.74 | 64.94 | 75.31 | 58.15 |
The cash conversion cycle of Designer Brands Inc has fluctuated over the past five years, ranging from 58.15 days to 75.31 days. The company's cash conversion cycle measures the time it takes for the company to convert its investment in inventory and accounts receivable into cash received from customers.
In the most recent period, the cash conversion cycle decreased to 58.93 days from 65.74 days in the previous year. This suggests that Designer Brands Inc has been more efficient in managing its working capital and converting its inventory and receivables into cash. However, it is important to note that the company's cash conversion cycle was lower in previous years, indicating potential improvements in working capital management.
Overall, while the recent decrease in the cash conversion cycle is a positive indicator of improved efficiency, further analysis and monitoring of the trend over time are necessary to assess the company's working capital management and overall financial health effectively.