ELF Beauty Inc (ELF)
Liquidity ratios
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.90 | 1.78 | 1.77 | 1.59 | 1.50 | 2.86 | 3.38 | 2.81 | 3.00 | 3.44 | 3.51 | 2.97 | 2.96 | 2.55 | 2.20 | 2.32 | 2.40 | 2.49 | 2.54 | 2.59 |
| Quick ratio | 0.89 | 0.78 | 0.88 | 0.78 | 0.64 | 1.67 | 2.12 | 1.75 | 1.75 | 1.94 | 2.02 | 1.37 | 1.28 | 1.25 | 1.32 | 1.37 | 1.24 | 1.23 | 1.47 | 1.48 |
| Cash ratio | 0.25 | 0.31 | 0.36 | 0.36 | 0.24 | 1.10 | 1.30 | 1.12 | 0.99 | 1.19 | 1.17 | 0.67 | 0.53 | 0.63 | 0.80 | 0.83 | 0.57 | 0.67 | 0.95 | 0.90 |
ELF Beauty Inc's liquidity ratios, specifically the current ratio, quick ratio, and cash ratio, provide insights into the company's ability to meet its short-term obligations.
1. Current Ratio:
- The current ratio measures the company's ability to cover its short-term liabilities with its short-term assets.
- ELF Beauty Inc's current ratio has shown a general declining trend from 2.59 in March 2020 to 1.90 in December 2024.
- A current ratio above 1 indicates that the company has more current assets than current liabilities, implying a good liquidity position.
- Despite the decline, ELF Beauty Inc maintained a current ratio above 1 throughout the period, suggesting it could meet its short-term obligations.
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.
- ELF Beauty Inc's quick ratio fluctuated over the period, ranging from 0.64 in December 2023 to 2.12 in June 2023.
- A quick ratio above 1 is generally considered acceptable, as it indicates the company can cover its short-term obligations without relying on selling inventory.
- ELF Beauty Inc's quick ratio mostly remained above 1, except in December 2023, implying a relatively strong ability to meet short-term liabilities.
3. Cash Ratio:
- The cash ratio is the most conservative liquidity ratio, measuring the company's ability to cover its current liabilities with cash and cash equivalents alone.
- ELF Beauty Inc's cash ratio ranged from 0.24 in December 2023 to 1.30 in June 2023.
- A cash ratio above 0.20 to 0.25 is typically considered satisfactory, as it shows the company has enough cash to cover its short-term obligations.
- Despite some fluctuations, ELF Beauty Inc generally maintained a cash ratio above the acceptable threshold, indicating a reasonable level of liquidity through cash reserves.
In summary, ELF Beauty Inc's liquidity ratios, including the current ratio, quick ratio, and cash ratio, demonstrate the company's ability to meet its short-term financial obligations, although there were some fluctuations observed over the period analyzed. Investors and stakeholders can use these ratios to assess the company's liquidity position and its ability to weather short-term financial challenges.
See also:
Additional liquidity measure
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 98.39 | 91.54 | 93.25 | 89.14 | 112.50 | 88.65 | 77.64 | 78.08 | 89.51 | 99.57 | 97.32 | 106.98 | 131.09 | 124.75 | 100.71 | 114.21 | 134.48 | 120.32 | 97.14 | 105.64 |
The cash conversion cycle of ELF Beauty Inc has shown fluctuations over the periods provided in the data. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flow from sales. A shorter cash conversion cycle is generally better, as it indicates that the company is able to generate cash more quickly from its operations.
From March 31, 2020, to December 31, 2024, ELF Beauty Inc's cash conversion cycle ranged from a high of 134.48 days to a low of 77.64 days. The company experienced a peak in the cycle in December 2021 at 131.09 days, followed by a decline over the next few periods, reaching a low point in June 2023 at 77.64 days. This suggests that the company improved its efficiency in managing its working capital during that period.
Overall, a downward trend in the cash conversion cycle indicates that ELF Beauty Inc was able to more efficiently manage its inventory, accounts receivable, and accounts payable, resulting in a shorter cycle and better cash flow generation. However, it is essential for the company to monitor and maintain this trend to ensure continued operational efficiency and financial health.