H&R Block Inc (HRB)
Liquidity ratios
| 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 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | Oct 31, 2019 | Jul 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.27 | 1.02 | 1.21 | 0.80 | 1.26 | 1.17 | 1.20 | 0.92 | 1.39 | 1.10 | 1.06 | 1.99 | 1.46 | 1.77 | 1.07 | 3.91 | 1.96 | 0.97 | 0.48 | 1.29 |
| Quick ratio | 1.15 | 0.92 | 0.96 | 0.61 | 1.12 | 1.04 | 0.92 | 0.49 | 0.94 | 0.77 | 0.54 | 1.26 | 0.97 | 1.22 | 0.51 | 3.52 | 1.78 | 0.76 | 0.25 | 0.93 |
| Cash ratio | 1.08 | 0.64 | 0.43 | 0.54 | 1.05 | 0.81 | 0.41 | 0.41 | 0.89 | 0.62 | 0.29 | 1.18 | 0.80 | 0.41 | 0.38 | 3.39 | 1.70 | 0.14 | 0.19 | 0.83 |
H&R Block Inc's liquidity ratios have displayed fluctuations over the past few quarters. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has generally fluctuated within a range of 0.80 to 1.99. This indicates varying degrees of liquidity in meeting its short-term obligations. The current ratio was highest in the quarter ended September 2021 at 1.99, suggesting a stronger ability to meet short-term liabilities.
The quick ratio, which provides a more stringent measure of liquidity by excluding inventory from current assets, has also fluctuated, ranging from 0.49 to 3.52. This ratio suggests the company's ability to meet its short-term obligations without relying on selling inventory. Notably, the quick ratio in the quarter ended July 2020 was 3.52, indicating a very high level of liquidity at that time.
The cash ratio, which is the most conservative liquidity measure as it only considers cash and cash equivalents to cover short-term liabilities, has ranged from 0.14 to 3.39. The cash ratio provides insights into the company's ability to cover its short-term obligations with its readily available cash. The highest cash ratio was recorded in the quarter ended July 2020 at 3.39, implying a strong ability to meet short-term liabilities using cash on hand.
Overall, H&R Block Inc's liquidity ratios have varied over the quarters, reflecting different levels of liquidity and ability to meet short-term obligations using different types of assets. It is important for investors and stakeholders to monitor these ratios to assess the company's financial health and its ability to manage liquidity effectively.
Additional liquidity measure
| 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 | Apr 30, 2021 | Jan 31, 2021 | Oct 31, 2020 | Jul 31, 2020 | Apr 30, 2020 | Jan 31, 2020 | Oct 31, 2019 | Jul 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | 7.14 | 36.15 | 42.49 | 10.47 | 10.15 | 29.85 | 39.07 | 6.61 | 6.32 | 22.34 | 37.91 | 7.13 | 21.83 | 73.85 | 8.70 | 11.81 | 18.80 | 98.14 | 9.02 | 9.22 |
The cash conversion cycle of H&R Block Inc has exhibited fluctuations over the various reporting periods. The cash conversion cycle represents the time it takes for a company to convert its investments in inventory and other resources into cash flows from sales and ultimately back into cash.
H&R Block Inc's cash conversion cycle ranged from 6.32 days to 98.14 days over the past few quarters. A shorter cash conversion cycle indicates that the company is able to quickly convert its investments in inventory and other resources into cash flows from sales. On the other hand, a longer cash conversion cycle may suggest inefficiencies in managing working capital and converting sales into actual cash.
It is worth noting that the company experienced a significant increase in its cash conversion cycle from 7.13 days in the third quarter of 2021 to 73.85 days in the first quarter of 2021, indicating a potential issue in managing working capital during that period. Subsequently, the company managed to reduce the cash conversion cycle to 7.14 days in the most recent quarter, indicating an improvement in efficiency in converting investments into cash.
Overall, monitoring the cash conversion cycle is crucial for evaluating the effectiveness of the company's working capital management and operational efficiency in converting investments into cash flows.