Guess? Inc. (GES)

Guess? Inc.'s liquidity ratios have fluctuated over the past few years based on the provided data.

1. Current Ratio:
- The current ratio measures the company's ability to cover its short-term liabilities with its short-term assets. Guess has maintained a relatively stable current ratio around 1.5 to 1.6 from January 2023 to January 2025. This indicates that the company has sufficient current assets to meet its short-term obligations.

2. Quick Ratio:
- The quick ratio, also known as the acid-test ratio, focuses on the most liquid current assets to cover immediate liabilities. Guess?'s quick ratio has shown significant variability over the years, ranging from 0.23 to 0.85. In January 2025, the quick ratio dropped to 0.23, suggesting a potential liquidity issue as the company's ability to meet short-term obligations with its most liquid assets decreased.

3. Cash Ratio:
- The cash ratio is a stricter measure of liquidity, considering only cash and cash equivalents in relation to current liabilities. Guess? Inc.'s cash ratio has also been inconsistent, fluctuating between 0.23 and 0.46. In January 2025, the cash ratio declined to 0.23, indicating that the company may have a lower ability to cover its short-term liabilities with cash resources alone.

Overall, while Guess? Inc. has maintained a stable current ratio indicating a generally healthy liquidity position, the significant fluctuations in the quick ratio and cash ratio, especially in January 2025, suggest potential challenges in meeting immediate obligations with highly liquid assets. Investors and stakeholders should monitor these ratios closely to assess the company's liquidity risk.

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Additional liquidity measure

The cash conversion cycle of Guess? Inc. has shown fluctuations over the years. In January 2023, the cash conversion cycle was 80.37 days, indicating that the company took approximately 80 days to convert its investments in inventory back to cash. By January 2024, the cycle had increased to 109.53 days, signifying a delay in the conversion of inventory to receivables and then to cash.

However, by February 2024, the cash conversion cycle decreased significantly to 69.87 days, reflecting an improvement in the company's ability to manage its working capital efficiently. In January 2025, the cycle increased again to 121.21 days, indicating a potential slowdown in cash conversion efficiency.

Overall, the analysis of Guess? Inc.'s cash conversion cycle suggests that the company experienced fluctuations in its working capital management over the years, with periods of both improvement and deterioration. It is essential for the company to continue monitoring and optimizing its cash conversion cycle to ensure efficient cash flow operations.