National Vision Holdings Inc (EYE)
Liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Current ratio | 0.53 | 1.00 | 1.38 | 1.50 | 1.72 |
| Quick ratio | 0.16 | 0.39 | 0.70 | 0.89 | 1.14 |
| Cash ratio | 0.16 | 0.39 | 0.70 | 0.89 | 1.14 |
National Vision Holdings Inc's liquidity ratios have shown a decreasing trend over the past few years.
1. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, declined from 1.72 in 2020 to 0.53 in 2024. This indicates a reduction in the company's ability to meet its short-term obligations using its current assets.
2. The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, also decreased from 1.14 in 2020 to 0.16 in 2024. This suggests a significant decline in the company's ability to cover its short-term liabilities without relying on inventory.
3. The cash ratio, which is the most conservative liquidity ratio as it only considers cash and cash equivalents, followed a similar downward trajectory from 1.14 in 2020 to 0.16 in 2024. This implies a diminishing ability of the company to meet its immediate obligations with its readily available cash.
Overall, the decreasing trend in these liquidity ratios indicates a potential liquidity challenge for National Vision Holdings Inc, raising concerns about its short-term financial health and ability to meet its obligations as they come due.
Additional liquidity measure
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 44.87 | 43.73 | 48.57 | 49.89 | 51.63 |
The cash conversion cycle for National Vision Holdings Inc has shown a decreasing trend over the years, indicating an improvement in the company's efficiency in managing its working capital.
On December 31, 2020, the cash conversion cycle stood at 51.63 days, which decreased to 49.89 days by December 31, 2021. Further improvement was seen in the following years, with the cycle reducing to 48.57 days on December 31, 2022, and 43.73 days by December 31, 2023.
Although there was a slight increase to 44.87 days on December 31, 2024, the overall trend suggests that National Vision Holdings Inc has been able to better manage its cash flows, inventory, and receivables, resulting in a shorter cash conversion cycle. This indicates that the company is efficiently converting its investments in inventory and receivables into cash, which is a positive sign for its liquidity and operational efficiency.