Haverty Furniture Companies Inc (HVT)

Haverty Furniture Companies Inc's liquidity ratios indicate the company's ability to meet its short-term obligations and cover immediate financial needs.

The current ratio has been relatively stable over the past five years, with a slight increase from 1.61 in 2019 to 1.82 in 2023. This ratio suggests that the company has $1.82 in current assets for every $1 of current liabilities, indicating a strong ability to meet short-term obligations.

The quick ratio, also known as the acid-test ratio, measures the company's ability to meet short-term liabilities with its most liquid assets. Despite fluctuating values over the years, the quick ratio has generally been below 1, with a notable increase in 2020 to 1.01. This suggests that the company may have limitations in meeting immediate obligations without relying on inventory.

The cash ratio, which is the most conservative liquidity measure, shows the firm's ability to cover current liabilities solely with cash and cash equivalents. Similar to the quick ratio, the company's cash ratio has been consistently below 1, indicating a limited ability to cover short-term liabilities with cash on hand alone.

Overall, Haverty Furniture Companies Inc's current ratio reflects a healthy liquidity position, while the quick ratio and cash ratio suggest that the company may have some reliance on non-cash assets to meet short-term obligations. It is important for the company to continue monitoring and managing its liquidity position to ensure financial stability and operational efficiency.

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Additional liquidity measure

The cash conversion cycle of Haverty Furniture Companies Inc has shown fluctuations over the past five years. In 2023, the cash conversion cycle decreased to 34.52 days from 37.31 days in 2022, indicating that the company was able to convert its inventory and accounts receivable into cash more quickly.

Comparing this trend to 2021, where the cycle was 32.97 days, and 2020, where it was 30.21 days, we observe an increasing trend over the last two years. However, the cycle was still lower in 2023 compared to 2019, where it was 36.83 days.

The cash conversion cycle measures how long it takes for a company to convert its resources into cash flows. A lower cash conversion cycle typically indicates more efficient management of inventory and accounts receivable. It is crucial for companies to monitor and manage their cash conversion cycle effectively to optimize working capital and improve overall financial performance.