Dick’s Sporting Goods Inc (DKS)

Liquidity ratios

Feb 3, 2024 Oct 28, 2023 Jul 29, 2023 Apr 29, 2023 Jan 28, 2023 Oct 29, 2022 Jul 30, 2022 Apr 30, 2022 Jan 29, 2022 Oct 30, 2021 Jul 31, 2021 May 1, 2021 Jan 30, 2021 Oct 31, 2020 Aug 1, 2020 May 2, 2020 Feb 1, 2020 Nov 2, 2019 Aug 3, 2019 May 4, 2019
Current ratio 1.78 1.65 1.81 1.96 1.88 1.81 1.82 1.88 1.88 1.52 1.72 1.56 1.47 1.40 1.35 2.04 1.16 1.38 1.28 1.31
Quick ratio 0.70 0.52 0.74 0.71 0.76 0.55 0.71 0.83 1.00 0.55 0.91 0.75 0.67 0.45 0.50 0.84 0.06 0.08 0.09 0.08
Cash ratio 0.65 0.47 0.69 0.65 0.73 0.52 0.68 0.80 0.97 0.51 0.87 0.72 0.65 0.42 0.46 0.79 0.03 0.04 0.06 0.05

The liquidity ratios of Dick’s Sporting Goods Inc show the company’s ability to meet its short-term obligations and provide insights into its financial health.

1. Current ratio: The current ratio has been fluctuating over the past few quarters, ranging from 1.16 to 2.04. A current ratio above 1 indicates that the company has more current assets than current liabilities, which is generally considered favorable. However, the company's current ratio has been relatively high, indicating a strong ability to cover its short-term obligations.

2. Quick ratio: The quick ratio, also known as the acid-test ratio, measures the company's ability to meet short-term obligations using its most liquid assets. The quick ratio has also been volatile, ranging from 0.06 to 1.00. A quick ratio above 1 is considered healthy, but Dick's Sporting Goods Inc has shown some fluctuations, indicating a varying ability to meet immediate liabilities without relying on inventory.

3. Cash ratio: The cash ratio, which is the most stringent liquidity measure, indicates the company's ability to cover its current liabilities using only cash and cash equivalents. Dick's Sporting Goods Inc has maintained a relatively stable cash ratio between 0.03 and 0.97. A higher cash ratio is generally preferred, as it signifies a stronger ability to cover short-term debts solely with cash holdings.

Overall, while the company's current ratio suggests a strong ability to meet its short-term obligations, the variability in the quick and cash ratios indicates some fluctuations in the company's ability to meet immediate liabilities with highly liquid assets. Monitoring these liquidity ratios over time can provide valuable insights into Dick’s Sporting Goods Inc's financial stability and ability to weather short-term financial challenges.

Additional liquidity measure

Feb 3, 2024 Oct 28, 2023 Jul 29, 2023 Apr 29, 2023 Jan 28, 2023 Oct 29, 2022 Jul 30, 2022 Apr 30, 2022 Jan 29, 2022 Oct 30, 2021 Jul 31, 2021 May 1, 2021 Jan 30, 2021 Oct 31, 2020 Aug 1, 2020 May 2, 2020 Feb 1, 2020 Nov 2, 2019 Aug 3, 2019 May 4, 2019
Cash conversion cycle days 51.15 55.96 52.86 63.05 55.79 67.89 56.13 49.91 37.96 41.39 31.51 30.93 30.97 42.61 37.51 61.05 54.34 68.49 58.11 57.33

The cash conversion cycle of Dick’s Sporting Goods Inc has fluctuated over the past 20 periods, ranging from a low of 30.93 days to a high of 68.49 days. The cash conversion cycle measures the time it takes for a company to convert its investments in inventory into cash inflows from sales.

A lower cash conversion cycle indicates that the company is efficient in managing its working capital and can quickly convert inventory into cash. Conversely, a higher cash conversion cycle suggests that the company is taking longer to sell its inventory and collect cash from customers, which may indicate inefficiencies in managing working capital.

In analyzing Dick’s Sporting Goods Inc's cash conversion cycle, we can observe that there have been fluctuations over time, with some periods showing shorter cycles indicating efficiency in working capital management, while other periods have longer cycles suggesting potential challenges in converting inventory into cash.

Overall, it is important for Dick’s Sporting Goods Inc to continually monitor and improve its cash conversion cycle to ensure efficient management of working capital and optimize its cash flow generation.