Deckers Outdoor Corporation (DECK)

Deckers Outdoor Corporation's liquidity ratios indicate its ability to meet short-term financial obligations with their current assets. The current ratio has fluctuated over the past five years, ranging from 3.23 to 3.97, with a value of 3.39 as of March 31, 2024. This ratio suggests that the company has more than enough current assets to cover its current liabilities.

The quick ratio, which provides a more conservative measure of liquidity by excluding inventory from current assets, has also shown variations but generally remained healthy, with a range of 2.15 to 2.80. As of March 31, 2024, the quick ratio stands at 2.56, indicating that the company can cover its short-term liabilities without relying on inventory.

The cash ratio, which is the most stringent measure of liquidity as it only considers cash and equivalents, has shown slight fluctuations over the years, ranging from 1.56 to 2.33. As of March 31, 2024, the cash ratio is 2.09, suggesting that Deckers Outdoor Corporation has a solid level of cash to cover its immediate liabilities.

Overall, based on these liquidity ratios, Deckers Outdoor Corporation appears to have a strong liquidity position, with ample current assets to meet its short-term financial obligations. This should provide investors and creditors with confidence in the company's ability to manage its working capital efficiently.

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See also:

Deckers Outdoor Corporation Liquidity Ratios

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Additional liquidity measure

The cash conversion cycle of Deckers Outdoor Corporation has shown fluctuation over the past five years. In the most recent period ending on March 31, 2024, the company's cash conversion cycle decreased significantly to 39.33 days compared to the previous year's figure of 63.59 days. This indicates that the company has improved its efficiency in managing cash flows from the operating cycle.

Looking further back, we can see that Deckers Outdoor Corporation experienced variations in its cash conversion cycle over the analyzed period. In March 31, 2021 and 2020, the company had shorter cash conversion cycles of 40.14 days and 66.37 days, respectively, compared to the years in between. This suggests potential changes in the company's working capital management strategies during those years.

It is worth noting that a shorter cash conversion cycle implies that the company is able to convert its investments in inventory and accounts receivable into cash more quickly, which may positively impact its liquidity and overall financial health. However, the company should continue to monitor and optimize its cash conversion cycle to ensure efficient use of resources and sustained profitability.