MarineMax Inc (HZO)

Marinemax, Inc.'s liquidity ratios provide insight into the company's ability to meet its short-term financial obligations. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has shown a declining trend over the past five years, indicating a decrease in the company's ability to meet its short-term obligations. The ratio decreased from 2.06 in 2021 to 1.33 in 2023.

Similarly, the quick ratio, which provides a more conservative measure of short-term liquidity by excluding inventory from current assets, also displays a decline over the same period. This downward trend suggests a decrease in the company's ability to meet its short-term obligations using its most liquid assets.

The cash ratio, which specifically measures the firm's ability to cover its short-term liabilities with its cash and cash equivalents, also follows a decreasing pattern, reflecting a decline in the proportion of cash and cash equivalents relative to current liabilities.

Overall, the declining trend in all three liquidity ratios indicates that Marinemax, Inc. may face challenges in meeting its short-term financial obligations. This trend may warrant further investigation into the company's working capital management and cash flow position to assess the underlying reasons for the decreasing liquidity ratios.

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Additional liquidity measure

The cash conversion cycle measures the time it takes for a company to convert its investments in inventory and other resources into cash. Marinemax, Inc.'s cash conversion cycle has been fluctuating over the past five years. In 2023, the cash conversion cycle increased to 186.55 days compared to 110.00 days in 2022, reflecting a prolonged period between the company's investment in inventory and the collection of cash from sales. This increase may indicate inefficiencies in inventory management or a slowdown in receivables collection. In 2021, the cash conversion cycle was 61.79 days, showing a significant improvement from the previous year, potentially reflecting more efficient inventory turnover and faster collection of receivables. However, in 2019, the cycle increased to 189.67 days, indicating a less efficient cash conversion process. Overall, it is important for Marinemax, Inc. to closely monitor and manage its cash conversion cycle to ensure optimal utilization of resources and cash flow efficiency.