Dream Finders Homes Inc (DFH)

Dream Finders Homes Inc's liquidity ratios have shown significant improvement over the past three years. The current ratio, which measures the company's ability to cover its short-term obligations with its current assets, has increased from 1.70 in 2021 to 3.28 in 2023, indicating a stronger liquidity position.

Similarly, the quick ratio, which excludes inventory from current assets to provide a more conservative measure of liquidity, has also improved from 0.30 in 2021 to 1.03 in 2023. This suggests that the company has a better ability to meet its short-term obligations without relying on inventory assets.

The cash ratio, which is the most conservative measure of liquidity as it only considers cash and cash equivalents, has shown the same trend of improvement, increasing from 0.30 in 2021 to 1.03 in 2023. This indicates that the company has a higher proportion of cash on hand relative to its current liabilities.

Overall, Dream Finders Homes Inc's liquidity ratios have strengthened over the past three years, reflecting an improved ability to meet its short-term financial obligations. This may signify better financial health and operational efficiency for the company.

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Additional liquidity measure

The cash conversion cycle for Dream Finders Homes Inc has significantly improved from 241.77 days in 2021 to 151.70 days in 2023. This indicates that the company is managing its cash flows more efficiently, reducing the time it takes to convert its investments in inventory and receivables into cash.

A lower cash conversion cycle suggests that Dream Finders Homes Inc is selling its products more quickly, collecting payments from customers faster, and managing its inventory levels effectively. This improvement in the cash conversion cycle can lead to enhanced liquidity and working capital management.

Overall, the trend of decreasing cash conversion cycles over the past three years reflects positively on Dream Finders Homes Inc's operational efficiency and financial health.