Foot Locker Inc (FL)
Liquidity ratios
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Feb 3, 2024 | Jan 31, 2024 | Oct 31, 2023 | Oct 28, 2023 | Jul 31, 2023 | Jul 29, 2023 | Apr 30, 2023 | Apr 29, 2023 | Jan 31, 2023 | Jan 28, 2023 | Oct 31, 2022 | Oct 29, 2022 | Jul 31, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 31, 2022 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.70 | 1.67 | 1.66 | 1.68 | 1.72 | 1.72 | 1.63 | 1.63 | 1.63 | 1.63 | 1.62 | 1.64 | 1.57 | 1.57 | 1.54 | 1.54 | 1.46 | 1.46 | 1.44 | 1.36 |
| Quick ratio | 0.30 | 0.15 | 0.21 | 0.20 | 0.35 | 0.23 | 0.13 | 0.13 | 0.12 | 0.12 | 0.21 | 0.21 | 0.33 | 0.43 | 0.25 | 0.23 | 0.25 | 0.24 | 0.35 | 0.46 |
| Cash ratio | 0.30 | 0.15 | 0.21 | 0.20 | 0.23 | 0.23 | 0.13 | 0.13 | 0.12 | 0.12 | 0.21 | 0.21 | 0.33 | 0.33 | 0.25 | 0.23 | 0.25 | 0.24 | 0.35 | 0.46 |
Foot Locker Inc's liquidity ratios show a positive trend over the period analyzed. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has increased steadily from 1.36 as of January 31, 2022, to 1.70 as of January 31, 2025. This indicates that Foot Locker has improved its liquidity position and is better equipped to meet its short-term obligations.
In contrast, the quick ratio, also known as the acid-test ratio, provides a more conservative measure of liquidity by excluding inventory from current assets. Foot Locker's quick ratio fluctuated over the period but generally remained low, ranging from 0.12 to 0.43. This suggests that the company may face challenges in meeting its immediate obligations without relying on selling inventory.
Lastly, the cash ratio, which specifically looks at the company's ability to cover its current liabilities with only cash and cash equivalents, also shows variance but ends on a positive note of 0.30 as of January 31, 2025. This indicates that Foot Locker has a comfortable level of cash to meet its short-term liabilities.
Overall, while Foot Locker has made progress in enhancing its liquidity position as seen in the rising current ratio, the lower quick and cash ratios signal that the company may still have room for improvement in managing its short-term liquidity effectively.
Additional liquidity measure
| Jan 31, 2025 | Oct 31, 2024 | Jul 31, 2024 | Apr 30, 2024 | Feb 3, 2024 | Jan 31, 2024 | Oct 31, 2023 | Oct 28, 2023 | Jul 31, 2023 | Jul 29, 2023 | Apr 30, 2023 | Apr 29, 2023 | Jan 31, 2023 | Jan 28, 2023 | Oct 31, 2022 | Oct 29, 2022 | Jul 31, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 31, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 97.36 | 97.99 | 86.99 | 86.69 | 62.01 | 84.23 | 102.90 | 71.14 | 104.13 | 71.82 | 131.41 | 93.53 | 116.24 | 90.89 | 89.75 | 62.32 | 94.02 | 77.34 | 114.71 | 92.68 |
The cash conversion cycle (CCC) of Foot Locker Inc, a key indicator of its operational efficiency, has shown fluctuations over the analyzed periods, ranging from a low of 62.32 days to a high of 131.41 days. The CCC represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.
Analyzing the data provided, we observe that Foot Locker Inc has experienced periods with shorter CCC, indicating a more efficient management of its working capital. For example, in October 2022 and July 2023, the company's CCC decreased significantly, suggesting effective inventory and receivables management.
Conversely, there have been periods where the CCC increased significantly, such as in April 2023 and January 2023. These increases could be attributed to factors like inventory buildup, slower collection of receivables, or inefficiencies in the supply chain management.
Overall, it is crucial for Foot Locker Inc to monitor and manage its cash conversion cycle effectively to optimize its working capital efficiency. By reducing the CCC, the company can enhance its liquidity position, improve profitability, and strengthen its overall financial health.