Helen of Troy Ltd (HELE)

The liquidity ratios of Helen of Troy Ltd for the past five years show varying levels of short-term liquidity. The current ratio, which measures the company's ability to meet short-term obligations with current assets, has ranged from 1.58 to 2.16. In general, the current ratio has been above 1, indicating that the company has had more than enough current assets to cover its current liabilities.

The quick ratio, also known as the acid-test ratio, provides a more stringent measure of liquidity by excluding inventory from current assets. Helen of Troy Ltd's quick ratio has fluctuated between 0.70 and 1.10 over the five-year period. This implies that the company may have had some difficulty meeting its short-term obligations with its most liquid assets in certain years, especially when the ratio was below 1.

The cash ratio, which is the most conservative liquidity metric as it only considers cash and cash equivalents, has shown a downward trend over the five years, dropping from 0.08 to 0.04. This suggests that the company may have had relatively less cash to cover its current liabilities in recent years.

Overall, Helen of Troy Ltd appears to have maintained a relatively healthy level of liquidity as indicated by the current ratio consistently above 1. However, the downward trend in the quick ratio and cash ratio in recent years may warrant closer attention to ensure the company's ability to meet its short-term obligations remains robust.

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Additional liquidity measure

The cash conversion cycle of Helen of Troy Ltd has shown some fluctuation over the past five years. It decreased from 99.36 days in 2020 to 96.12 days in 2021, indicating an improvement in the efficiency of managing cash, inventory, and receivables. However, there was a slight increase in the cash conversion cycle in the following years, with figures reaching 121.91 days in 2022 and 119.24 days in 2023, suggesting a potential slowdown in the company's cash conversion process.

In the most recent period, the cash conversion cycle decreased to 104.98 days in 2024, which could indicate a positive trend in the company's working capital management practices. Overall, fluctuations in the cash conversion cycle may reflect changes in the company's operational efficiency, liquidity management, and effectiveness in converting inventory and receivables into cash. Analyzing trends in the cash conversion cycle can provide insights into the company's ability to efficiently manage its working capital and generate cash flow.