Inter Parfums Inc (IPAR)

Liquidity ratios

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Current ratio 2.75 2.58 2.29 2.90 3.85
Quick ratio 1.55 1.35 1.40 2.00 2.72
Cash ratio 0.71 0.56 0.74 1.31 1.90

Inter Parfums Inc's liquidity ratios have shown some fluctuations over the past five years.

1. Current Ratio: The current ratio measures the company's ability to cover its short-term obligations with its current assets. In 2020, the current ratio was 3.85, indicating the company had more than enough current assets to cover its current liabilities. However, the ratio decreased over the years, reaching 2.75 in 2024. While the current ratio remains above 1, indicating the company can meet its short-term obligations, the decreasing trend suggests a potential decrease in liquidity over the years.

2. Quick Ratio: The quick ratio is a more stringent measure of liquidity as it excludes inventories from current assets. Inter Parfums Inc's quick ratio decreased from 2.72 in 2020 to 1.55 in 2024. This indicates that the company may have a lower ability to cover its short-term liabilities with its most liquid assets, such as cash and receivables.

3. Cash Ratio: The cash ratio specifically focuses on the company's ability to cover its current liabilities with its cash and cash equivalents. Inter Parfums Inc's cash ratio decreased from 1.90 in 2020 to 0.71 in 2024, indicating a significant decline in the company's ability to cover its short-term obligations with its cash reserves alone.

Overall, the decreasing trend in the liquidity ratios of Inter Parfums Inc suggests a potential decrease in liquidity and ability to meet short-term obligations over the past five years. It is important for the company to closely monitor its liquidity position and ensure it maintains adequate levels of liquid assets to cover its short-term liabilities.


Additional liquidity measure

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Cash conversion cycle days 148.16 279.92 263.67 202.77 303.13

Interpreting the cash conversion cycle of Inter Parfums Inc shows a fluctuation in efficiency over the years. From December 31, 2020, to December 31, 2021, there was a significant improvement in the cycle, reducing the days from 303.13 to 202.77 days. This indicates a more efficient process in converting investments in inventory and other resources into cash receipts.

However, by December 31, 2022, the cycle extended to 263.67 days, suggesting a potential delay in converting sales into cash inflows. By the end of 2023, the cycle further increased to 279.92 days, indicating prolonged periods in the conversion process.

The most recent data point as of December 31, 2024, shows a notable improvement in the cash conversion cycle, decreasing to 148.16 days. This sharp decline could signify enhanced efficiency in managing working capital, inventory turnover, and collection of receivables.

Overall, the trend in the cash conversion cycle of Inter Parfums Inc has shown variations, with improvements followed by setbacks. It is essential for the company to focus on streamlining processes to maintain a healthy and efficient cash conversion cycle in the future.