Dine Brands Global Inc (DIN)

Dine Brands Global Inc's liquidity ratios have shown some fluctuations over the past five years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has been on a declining trend from 1.68 in 2020 to 0.78 in 2023. This indicates that the company may be facing challenges in meeting its short-term obligations with its current assets.

Similarly, the quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also shown a decreasing trend from 1.57 in 2020 to 0.70 in 2023. This suggests that the company may have limited ability to meet its short-term liabilities without relying on inventory.

The cash ratio, which is the most conservative measure of liquidity and evaluates the company's ability to cover its current liabilities with cash and cash equivalents, has also decreased from 1.22 in 2020 to 0.42 in 2023. This indicates that the company may have a reduced ability to meet its short-term obligations solely with its cash reserves.

Overall, the decreasing trend in all three liquidity ratios suggests that Dine Brands Global Inc may be experiencing deteriorating liquidity position over the past years. It is vital for the company to closely monitor its liquidity position and take appropriate measures to ensure it can meet its short-term obligations in a timely manner.

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Additional liquidity measure

Dine Brands Global Inc's cash conversion cycle has fluctuated over the past five years. In 2023, the company's cash conversion cycle was at -47.02 days, indicating that it takes 47.02 fewer days for the company to convert its investments in inventory and other resources into cash compared to the previous year. This substantial decrease could be a result of improved inventory management or faster collection of receivables.

Comparing this to the data from 2022 and 2021, the negative cash conversion cycle suggests that the company is efficient in managing its working capital and converting its operating cycle into cash quickly. However, it is worth noting that the negative cycle indicates that the company is able to collect cash from its customers before paying its suppliers, which can be a sign of favorable working capital management.

On the other hand, the positive cash conversion cycle in 2020 and 2019, at 24.17 days and 20.67 days respectively, may indicate that the company was taking a longer time to convert its investments in inventory and receivables into cash during those periods.

Overall, the trend in Dine Brands Global Inc's cash conversion cycle highlights the company's ability to efficiently manage its working capital and convert its resources into cash, contributing to its liquidity and financial health.