National Vision Holdings Inc (EYE)
Liquidity ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Current ratio | 1.00 | 1.38 | 1.50 | 1.72 | 0.86 |
| Quick ratio | 0.60 | 0.90 | 1.05 | 1.31 | 0.31 |
| Cash ratio | 0.38 | 0.67 | 0.89 | 1.14 | 0.14 |
Based on the provided data, National Vision Holdings Inc's liquidity ratios show fluctuations over the past five years.
The current ratio, which measures the company's ability to cover short-term obligations with its current assets, decreased from 1.72 in 2020 to 1.00 in 2023, indicating a decline in the company's short-term liquidity position.
The quick ratio, a more stringent measure of liquidity as it excludes inventory from current assets, also experienced a downward trend from 1.31 in 2020 to 0.60 in 2023. This suggests that the company may have trouble meeting its immediate financial obligations without relying on the sale of inventory.
The cash ratio, which is the most conservative liquidity measure as it only considers cash and cash equivalents, shows a similar pattern. It decreased from 1.14 in 2020 to 0.38 in 2023, indicating a reduction in the company's ability to pay off its current liabilities solely with cash on hand.
Overall, the decreasing trend in National Vision Holdings Inc's liquidity ratios over the years raises concerns about its short-term liquidity position and ability to meet its financial obligations promptly. Monitoring these ratios closely is essential to ensure the company's financial health and stability in the future.
Additional liquidity measure
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 23.69 | 25.38 | 21.13 | 23.16 | 28.90 |
The cash conversion cycle is an important metric that measures how long it takes for a company to convert its investments in inventory and other resources into cash inflows from sales. In the case of National Vision Holdings Inc, the trend in the cash conversion cycle over the past five years shows fluctuations.
In 2023, the cash conversion cycle decreased to 23.69 days from 25.38 days in 2022, indicating an improvement in the company's efficiency in managing its cash flow. This may suggest that National Vision Holdings Inc has been able to optimize its inventory management and collection processes, leading to a shorter time period to convert its investments into cash.
Comparing to previous years, the cash conversion cycle was lower in 2021 at 21.13 days compared to 2022 and 2023, showing even better efficiency in cash management during that year. However, the cash conversion cycle increased in 2020 and 2019, indicating potential challenges in managing cash flow efficiency in those years.
Overall, National Vision Holdings Inc's cash conversion cycle has shown some variability over the past five years, with fluctuations in efficiency in converting investments into cash flow. It is essential for the company to continue monitoring and improving its cash conversion cycle to ensure optimal cash flow management and operational efficiency.