Hanesbrands Inc (HBI)

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 1.64 1.57 1.67 1.72 1.75 1.71 1.70 1.60 1.52 1.62 1.60 1.64 1.61 2.02 2.01 2.19 1.82 1.73 1.76 1.66
Quick ratio 0.55 0.55 0.51 0.12 0.54 0.57 0.57 0.61 0.61 0.75 0.72 0.67 0.79 0.84 0.93 1.00 0.65 0.65 0.61 0.55
Cash ratio 0.15 0.12 0.11 0.12 0.13 0.12 0.12 0.18 0.23 0.36 0.30 0.26 0.42 0.36 0.34 0.60 0.19 0.15 0.13 0.13

Hanesbrands Inc's liquidity ratios reflect fluctuations over the past few quarters. The current ratio, which measures the company's ability to meet short-term obligations with its current assets, has varied between 1.52 and 1.75. While the current ratio has generally remained above 1, indicating that the company has more than enough current assets to cover its current liabilities, there have been some declines in recent quarters.

The quick ratio, a more stringent measure of liquidity that excludes inventory from current assets, has ranged from 0.12 to 1.00. The trend in the quick ratio shows more volatility compared to the current ratio, with a significant drop to 0.12 in March 2023 before recovering to 1.00 in March 2020. This suggests that the company's ability to meet its short-term obligations without relying on inventory has varied widely.

Lastly, the cash ratio, which measures the company's ability to cover its current liabilities with its cash and cash equivalents, has fluctuated between 0.11 and 0.60. The cash ratio has shown some improvement in recent quarters, with the ratio increasing to 0.60 in March 2020.

Overall, while Hanesbrands Inc has generally maintained a current ratio above 1, indicating a sufficient level of liquidity, there are fluctuations in the quick and cash ratios that may warrant further investigation into the company's cash management and ability to meet short-term obligations.

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 82.65 96.10 102.91 69.79 110.06 114.14 103.11 84.62 69.86 71.66 71.37 71.60 69.39 110.02 106.97 100.04 109.60 138.88 155.66 155.05

The cash conversion cycle measures how long it takes a company to convert its investments in inventory and other resources into cash from sales. A shorter cash conversion cycle indicates that the company is more efficient in managing its working capital.

Analyzing Hanesbrands Inc's cash conversion cycle over the past few quarters, we can observe fluctuations in the efficiency of the company's working capital management. In the most recent quarter ending December 31, 2023, the cash conversion cycle stood at 82.65 days, showing an improvement compared to the previous quarter's 96.10 days. This suggests that the company was able to reduce the time it takes to convert its investments into cash.

Looking deeper at historical data, we can see that Hanesbrands Inc experienced a peak cash conversion cycle of 155.66 days in the third quarter of 2019, indicating a significant inefficiency in managing its working capital at that time. Subsequently, the company made significant improvements in its cash conversion cycle, with fluctuations observed in each quarter thereafter.

Overall, a downward trend in the cash conversion cycle indicates that Hanesbrands Inc has been working on improving its working capital management efficiency. However, periodic fluctuations suggest that further efforts may be needed to stabilize and optimize the cash conversion cycle for sustained operational efficiency and profitability.