Dick’s Sporting Goods Inc (DKS)

Based on the provided data, the liquidity ratios of Dick’s Sporting Goods Inc show consistency and stability over the years under examination.

1. Current Ratio: The current ratio, indicating the company's ability to cover its short-term liabilities with its current assets, has remained relatively stable around the 1.8 mark throughout the period. This suggests that Dick’s Sporting Goods Inc has sufficient current assets to meet its short-term obligations comfortably.

2. Quick Ratio: The quick ratio, which provides a more stringent measure of liquidity by considering only the most liquid assets, shows a slight fluctuation over the years but generally decreasing trend. This may indicate that a smaller proportion of the company's current assets are in highly liquid form, such as cash or near-cash equivalents.

3. Cash Ratio: The cash ratio, focusing solely on the company's ability to cover its current liabilities with its cash and cash equivalents, also exhibits a decreasing trend over the period. This could signal a potential decrease in the company's ability to quickly settle its short-term obligations with readily available cash.

In conclusion, while Dick’s Sporting Goods Inc maintains a healthy current ratio above industry standards, the decreasing quick and cash ratios suggest a potential decrease in the company's immediate liquidity position. It would be important to monitor these ratios closely to ensure the company's ability to meet its short-term financial obligations efficiently.

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Additional liquidity measure

Based on the provided data, Dick’s Sporting Goods Inc's cash conversion cycle shows fluctuations over the years. The company's cash conversion cycle was 54.98 days on January 28, 2023, decreased significantly to 50.40 days by February 3, 2024, and then increased to 141.89 days by January 31, 2025. These fluctuations indicate changes in the company's efficiency in converting its investments in inventory and receivables into cash.

A lower cash conversion cycle indicates that the company is managing its working capital efficiently, which can be beneficial as it implies that Dick’s Sporting Goods Inc is able to generate cash quickly from its sales. Conversely, a higher cash conversion cycle suggests a longer time for the company to convert its investments into cash, possibly due to slower inventory turnover or longer collection periods on receivables.

It is important for Dick’s Sporting Goods Inc to monitor and manage its cash conversion cycle effectively to optimize its working capital management. By analyzing the trends and identifying the factors influencing these fluctuations, the company can implement strategies to improve its cash flow and overall financial performance.