Floor & Decor Holdings Inc (FND)

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	1.20	1.16	1.17	1.17	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
Quick ratio	0.15	0.15	0.12	0.05	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
Cash ratio	0.15	0.15	0.12	0.05	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

The liquidity ratios of Floor & Decor Holdings Inc indicate its ability to meet short-term obligations and manage immediate cash needs.

1. Current Ratio: The current ratio has shown a slight declining trend over the past few years, starting at 1.88 in March 2020 and reaching 1.20 by June 2024. A current ratio above 1 implies that the company has more current assets than current liabilities, with a ratio of 1.20 in June 2024 indicating that the company has $1.20 in current assets for every $1 in current liabilities.

2. Quick Ratio: The quick ratio, also known as the acid-test ratio, measures the company's ability to pay off its current liabilities without relying on the sale of inventory. The quick ratio has fluctuated over the years, with a low of 0.00 in June 30, 2023, and a high of 0.53 in March 31, 2021. A quick ratio below 1 implies a potential inability to cover immediate liabilities with liquid assets.

3. Cash Ratio: The cash ratio focuses solely on the most liquid assets, cash, and cash equivalents, to cover current liabilities. The ratio remained relatively stable around 0.01 to 0.15 from March 2021 to December 2024. A higher cash ratio indicates a stronger ability to cover short-term obligations with cash on hand.

Overall, while the current ratio suggests that Floor & Decor Holdings Inc has adequate current assets to cover its current liabilities, the quick and cash ratios indicate the company may face challenges in meeting its short-term obligations without relying on inventory sales or non-cash assets. Monitoring these ratios is crucial for assessing the company's liquidity position and financial health.

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	156.45	145.60	143.93	145.66	157.99	157.51	163.85	165.23	183.05	190.92	209.20	191.91	182.96	162.82	142.90	146.15	171.62	171.76	182.45	175.38

Floor & Decor Holdings Inc's cash conversion cycle has shown fluctuations over the years. The company's cash conversion cycle measures the time it takes for the company to convert its investments in inventory into cash receipts from sales.

From March 31, 2020, to June 30, 2021, the trend was generally decreasing, indicating the company was improving its management of inventory, accounts receivable, and accounts payable. This led to a more efficient cash conversion cycle, from 175.38 days in March 2020 to 142.90 days in June 2021.

However, from September 30, 2021, to June 30, 2022, there was an increase in the cash conversion cycle, reaching a peak of 209.20 days in June 2022. This increase might be attributed to issues in managing inventory levels, delayed collections from customers, or extended payment terms to suppliers.

Subsequently, there was a fluctuation in the cash conversion cycle from September 30, 2022, to December 31, 2024, with some improvements seen in the efficiency of the cycle compared to the peak in June 2022. Overall, the company needs to monitor and manage its inventory levels, receivables, and payables effectively to maintain a healthy cash conversion cycle and enhance cash flow management.