Dollar General Corporation (DG)

Based on the provided data, I have analyzed the liquidity ratios of Dollar General Corporation as follows:

1. Current Ratio:
- The current ratio measures the company's ability to pay its short-term obligations with its current assets.
- Dollar General's current ratio remained relatively stable at around 1.29 in January 2023 and February 2023, indicating that the company had $1.29 in current assets for every $1 in current liabilities.
- However, the current ratio decreased to 1.19 in January 2024 and February 2024, suggesting a slight decline in the company's short-term liquidity position.
- By January 2025, the current ratio remained at 1.19, indicating a consistent level of liquidity compared to the previous year.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets.
- Dollar General's quick ratio increased from 0.06 in January 2023 to 0.14 in January 2025, which signifies an improvement in the company's ability to meet its short-term obligations without relying on inventory.
- The gradual increase in the quick ratio suggests an enhancement in Dollar General's liquidity position over the analyzed period.

3. Cash Ratio:
- The cash ratio indicates the proportion of the company's current liabilities that can be covered by its cash and cash equivalents.
- Dollar General's cash ratio remained stable at 0.06 in January 2023 and February 2023, but subsequently increased to 0.14 in January 2025.
- The rise in the cash ratio indicates an increase in the company's ability to cover its short-term liabilities with cash reserves.

Overall, the liquidity ratios of Dollar General Corporation demonstrate a mix of stability and improvement in its short-term liquidity position over the analyzed period, with the quick and cash ratios showing more positive trends compared to the current ratio. It is important for investors and stakeholders to closely monitor these ratios to assess the company's financial health and ability to meet its obligations in a timely manner.

---

See also:

Dollar General Corporation Liquidity Ratios

---

Additional liquidity measure

The cash conversion cycle of Dollar General Corporation has shown fluctuations over the years. In January 2023, the cash conversion cycle was 94.82 days, indicating that the company took nearly 95 days to convert its resources into cash. By February 2023, this cycle decreased significantly to 35.24 days, implying a more efficient conversion process.

However, in January 2024, the cash conversion cycle increased again to 94.65 days, similar to the previous year, suggesting a slower conversion of resources into cash. By February 2024, the cycle improved slightly to 35.37 days but remained relatively stable compared to the previous year.

In January 2025, Dollar General Corporation achieved a better cash conversion cycle of 85.67 days, indicating a faster conversion of resources into cash compared to the previous years. Overall, the company has experienced variations in its cash conversion cycle, with some fluctuations indicating improvements in efficiency but also periods of slower cash conversion.