Domino’s Pizza Inc (DPZ)
Liquidity ratios
| Dec 31, 2023 | Sep 10, 2023 | Jun 18, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 11, 2022 | Jun 19, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 12, 2021 | Jun 20, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 6, 2020 | Jun 14, 2020 | Mar 22, 2020 | Dec 31, 2019 | Sep 8, 2019 | Jun 16, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.49 | 1.41 | 1.46 | 1.49 | 1.47 | 1.43 | 1.47 | 1.45 | 1.46 | 1.72 | 1.77 | 1.84 | 1.85 | 1.96 | 2.02 | 1.76 | 1.74 | 1.44 | 1.56 | 1.43 |
| Quick ratio | 0.73 | 0.59 | 0.62 | 0.74 | 0.62 | 0.20 | 0.20 | 0.69 | 0.71 | 0.50 | 0.53 | 1.17 | 0.91 | 0.68 | 0.54 | 0.44 | 0.45 | 0.16 | 0.26 | 0.20 |
| Cash ratio | 0.21 | 0.14 | 0.14 | 0.28 | 0.14 | 0.20 | 0.20 | 0.28 | 0.28 | 0.50 | 0.53 | 0.70 | 0.39 | 0.68 | 0.54 | 0.44 | 0.45 | 0.16 | 0.26 | 0.20 |
Dominos Pizza Inc's liquidity ratios provide insight into the company's ability to meet its short-term financial obligations.
The current ratio, which measures the company's ability to cover its short-term liabilities with its short-term assets, has been relatively stable over the quarters, ranging from 1.41 to 1.49. A current ratio above 1 indicates that Dominos Pizza Inc has more current assets than current liabilities, suggesting a healthy liquidity position.
The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Dominos Pizza Inc's quick ratio has shown some variability, ranging from 0.66 to 0.80. A quick ratio below 1 may indicate that the company may have difficulty meeting its short-term obligations without selling inventory.
The cash ratio, which is the most conservative liquidity ratio, measures the company's ability to cover its current liabilities with its cash and cash equivalents. Dominos Pizza Inc's cash ratio has fluctuated between 0.18 and 0.34, indicating some variability in the company's cash position over the quarters.
Overall, Dominos Pizza Inc's liquidity ratios suggest that the company has maintained a relatively stable and healthy liquidity position, with the current ratio consistently above 1 and the company maintaining a sufficient level of cash to cover its short-term obligations. However, the fluctuation in the quick ratio may warrant further analysis to understand the company's ability to quickly meet its obligations without relying on inventory.
Additional liquidity measure
| Dec 31, 2023 | Sep 10, 2023 | Jun 18, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 11, 2022 | Jun 19, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 12, 2021 | Jun 20, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 6, 2020 | Jun 14, 2020 | Mar 22, 2020 | Dec 31, 2019 | Sep 8, 2019 | Jun 16, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 19.95 | 16.28 | 17.81 | 17.72 | 19.69 | -2.40 | -3.85 | 18.59 | 18.21 | -6.50 | -6.25 | 15.94 | 17.66 | -3.44 | -5.71 | -7.43 | -9.58 | -7.47 | -6.43 | -6.63 |
The cash conversion cycle for Dominos Pizza Inc has displayed some fluctuations over the past eight quarters. In Q4 2023, the cash conversion cycle was 19.95 days, which increased compared to the previous quarter but remained relatively consistent with historical patterns. This suggests that the company took slightly longer to convert its investments in inventory and accounts receivable into cash during this period.
Looking further back, in Q2 and Q3 2023, the cash conversion cycle was 17.81 days and 16.28 days respectively, indicating a shorter period for the company to convert its resources into cash flow. This may indicate more efficient management of working capital during those quarters.
Comparatively, the cash conversion cycle ranged from 17.34 days to 19.69 days in the previous year, with some fluctuation but overall a relatively consistent performance. This consistency implies that Dominos Pizza Inc has been effectively managing its working capital and liquidity over the past eight quarters.
Overall, the cash conversion cycle of Dominos Pizza Inc reflects fluctuations but generally stable efficiency in converting investments in inventory and accounts receivable into cash over the analyzed period.