Fox Factory Holding Corp (FOXF)

The current ratio of Fox Factory Holding Corp has fluctuated over the reporting periods, ranging from a low of 2.80 to a high of 4.23. This ratio indicates the company's ability to meet its short-term obligations with current assets. Generally, a current ratio above 1 suggests the company can cover its short-term liabilities. Fox Factory Holding Corp has maintained a current ratio consistently above 2.5, reflecting a strong liquidity position.

The quick ratio of the company has also varied, with values ranging between 0.24 and 1.84. The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity as it excludes inventory from current assets. A quick ratio above 1 indicates that the company can meet its short-term liabilities without relying heavily on inventory sales. Fox Factory Holding Corp's quick ratio has generally been above 0.5, demonstrating a solid ability to cover immediate obligations with its most liquid assets.

The cash ratio, which is a subset of the quick ratio, shows the proportion of a company's current liabilities that can be covered by cash and cash equivalents alone. Fox Factory Holding Corp's cash ratio has followed a similar trend to the quick ratio, with values ranging from 0.24 to 1.84. The company's cash ratio has consistently been above 0.2, indicating that it has a sufficient level of cash on hand to meet its short-term obligations without relying on other current assets.

Overall, based on the analysis of the liquidity ratios, Fox Factory Holding Corp appears to maintain a strong liquidity position with a current ratio consistently above 2.5, a quick ratio consistently above 0.5, and a cash ratio consistently above 0.2.

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Additional liquidity measure

The cash conversion cycle is a measure that represents the time it takes for a company to convert its investments in inventory and other resources into cash from sales. For Fox Factory Holding Corp, it's seen a fluctuation in its cash conversion cycle over the years.

Beginning in March 2020 with 108.76 days, the cycle decreased gradually over the next year until December 2020, reaching its lowest point of 77.18 days. This suggested that the company was able to manage its inventory efficiently, collect cash from customers, and convert inventory into sales relatively quickly during this period.

However, from March 2021 onwards, the cash conversion cycle started to increase, indicating potential challenges in managing inventory levels or delays in receiving payment from customers. The cycle peaked at 150.02 days in September 2024, a significant increase from the previous low in December 2020.

The increasing trend in the cash conversion cycle could signal potential liquidity concerns or operational inefficiencies for Fox Factory Holding Corp. It may be important for the company to assess its inventory management, sales processes, and accounts receivable practices to improve cash flow and overall financial performance.