MarineMax Inc (HZO)

MarineMax Inc's liquidity ratios have shown a decreasing trend over the years, indicating potential challenges in the company's ability to meet short-term obligations.

The current ratio, which measures the company's ability to cover short-term liabilities with current assets, has declined from 2.06 in 2021 to 1.19 in 2024. This suggests that MarineMax may have fewer liquid assets available to cover its current liabilities.

The quick ratio, also known as the acid-test ratio, measures the company's ability to meet short-term obligations without relying on inventory. MarineMax's quick ratio has also decreased from 1.08 in 2021 to 0.31 in 2024, indicating a potential liquidity strain.

The cash ratio, which is the most conservative liquidity ratio, measures the company's ability to cover short-term obligations with cash and cash equivalents. MarineMax's cash ratio has declined from 0.88 in 2021 to 0.21 in 2024, signaling a decreased capacity to meet immediate payment obligations with cash on hand.

Overall, the declining trend in MarineMax Inc's liquidity ratios suggests a potential need for the company to improve its cash management and liquidity position to ensure financial stability and meet short-term obligations effectively.

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Additional liquidity measure

The cash conversion cycle of MarineMax Inc has exhibited varying trends over the past five years. In the most recent fiscal year ending on September 30, 2024, the company's cash conversion cycle increased to 207.17 days, signaling a prolonged period for the company to convert inventory into cash. This represents a significant deterioration compared to the prior year's figure of 186.77 days.

Looking back further, in the fiscal year ending on September 30, 2023, the cash conversion cycle stood at 110.19 days, indicating a more efficient management of working capital compared to the latest period. However, there was a substantial jump in the cash conversion cycle in the fiscal year ending September 30, 2022, where it reached 62.03 days, suggesting a lengthened time between the company's outlay of cash for inventory and the receipt of cash from sales.

Prior to that, in the fiscal year ending on September 30, 2021, the cash conversion cycle was 95.67 days, reflecting a more favorable position compared to the subsequent years. This indicates that MarineMax Inc was able to convert its investments in inventory into cash relatively quicker during that period.

Overall, the fluctuation in MarineMax Inc's cash conversion cycle over the past five years highlights the importance of analyzing working capital management practices to ensure efficient operations and cash flow generation. A prolonged cash conversion cycle can tie up valuable resources and impact overall liquidity and financial performance.