Floor & Decor Holdings Inc (FND)
Liquidity ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.14 | 1.14 | 1.20 | 1.32 | 1.45 | 1.41 | 1.26 | 1.21 | 1.23 | 1.28 | 1.35 | 1.58 | 1.49 | 1.57 | 1.56 | 1.88 | 1.27 | 1.31 | 1.33 | 1.32 |
| Quick ratio | 0.05 | 0.07 | 0.02 | 0.01 | 0.02 | 0.02 | 0.02 | 0.03 | 0.14 | 0.33 | 0.43 | 0.53 | 0.44 | 0.44 | 0.25 | 0.57 | 0.05 | 0.17 | 0.12 | 0.00 |
| Cash ratio | 0.03 | 0.05 | 0.00 | 0.01 | 0.01 | 0.01 | 0.01 | 0.03 | 0.14 | 0.33 | 0.43 | 0.53 | 0.44 | 0.44 | 0.25 | 0.57 | 0.05 | 0.17 | 0.12 | 0.00 |
Floor & Decor Holdings Inc's liquidity ratios exhibit fluctuations over the periods analyzed. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has ranged from 1.14 to 1.88. The ratio generally improved from 2019 to 2020 but decreased significantly in the latter periods, indicating potential difficulty in covering short-term obligations.
The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has been volatile, ranging from 0.01 to 0.57. The ratio shows a similar trend to the current ratio, suggesting that the company may struggle to meet immediate obligations without relying on inventory.
The cash ratio, reflecting the ability to cover short-term liabilities with cash and cash equivalents, has also varied widely, from 0.00 to 0.57. While the cash ratio improved in more recent periods, it still indicates a limited ability to cover short-term obligations solely with available cash.
Overall, the liquidity ratios of Floor & Decor Holdings Inc indicate fluctuating levels of short-term liquidity, with potential challenges in meeting immediate financial obligations without relying on inventory or additional financing.
Additional liquidity measure
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 37.72 | 35.24 | 44.57 | 52.73 | 62.75 | 63.22 | 56.92 | 47.45 | 38.69 | 23.76 | 19.69 | 29.46 | 36.40 | 55.88 | 68.49 | 67.16 | 55.98 | 31.41 | 34.60 | 43.26 |
The cash conversion cycle of Floor & Decor Holdings Inc has shown some fluctuations over the past few quarters. The company's cash conversion cycle measures the time it takes to convert its investments in inventory and other resources into cash flows from sales.
Between March 2019 and September 2021, the cash conversion cycle was relatively stable, with efficiencies observed in the business operations leading to a decreasing trend. However, from December 2021 onwards, the cycle started to increase, reaching a peak in September 2022 before slightly declining. This increase in the cash conversion cycle may indicate challenges in managing inventory levels, collection of receivables, or settling payables within the business.
The company should focus on optimizing its inventory management, speeding up the collection of receivables, and efficiently managing its payables to reduce the cash conversion cycle. A shorter cash conversion cycle indicates that a company is able to generate cash more quickly from its operations, which is a positive sign for its financial health and efficiency in managing working capital.